The 2026 DTI cap: how it affects what you can borrow (and 3 ways around it)
APRA's debt-to-income macroprudential guidance — effective 1 February 2026 — limits how much banks can lend to borrowers with a DTI of 6x or above. Here's what that means for your mortgage, and what broker-assisted options remain open to you.
What is a debt-to-income ratio?
Your debt-to-income (DTI) ratio compares the total debt you are taking on to your gross annual household income. The formula is straightforward:
Worked examples
Household income: $100,000
Total debt: $560,000
5.6x — Below cap
Household income: $100,000
Total debt: $620,000
6.2x — Above cap
Household income: $140,000
Total debt: $800,000
5.7x — Below cap
Household income: $120,000
Total debt: $760,000
6.3x — Above cap
These are illustrative examples only. Actual lender assessments vary and include servicing calculations, living expenses, and credit history.
What APRA's guidance actually says
APRA updated its macroprudential guidance effective 1 February 2026, directing authorised deposit-taking institutions (ADIs) to keep new lending at a DTI of 6 or above to no more than 20% of their total new residential lending flows. The cap applies separately to owner-occupier and investor portfolios.
This means a bank that writes $100m in new home loans in a given period can allow no more than $20m of that to sit at a DTI of 6x or higher — 80% must go to borrowers at DTI below 6x.
Verify before you act: APRA periodically updates its macroprudential settings. Always check the current policy at apra.gov.au or speak to a broker who monitors ADI lending policies in real time. Last reviewed by Obtain Finance: June 2026.
Check your indicative DTI
Indicative DTI checker
Enter your gross household income and the total debt you would be taking on (new mortgage + existing committed debts). This is indicative only — not credit advice.
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Know your DTI — find out which lenders will work with your situation.
Three broker-assisted pathways if your DTI is above 6x
The APRA guidance is not an absolute ban — it is a flow limit. Several legitimate pathways remain open, which an experienced broker can navigate for you.
New dwelling / construction loans — explicitly exempt
APRA's guidance explicitly exempts loans for the construction of a new dwelling from the DTI flow cap. A house and land package funded via a construction loan — where the land contract and build contract are separate, and the lender draws down progressively as each building stage is completed — is structured as a new dwelling loan.
This makes new construction in high-growth corridors like Western Sydney a strategically valuable option for borrowers who would otherwise exceed the 6x threshold on an established-home purchase.
Owner-occupier bridging loans — exempt in the guidance
Owner-occupier bridging finance — where an existing homeowner borrows to purchase before selling their current property — is also excluded from the DTI flow cap under the APRA guidance. If you own a home and are upgrading, this may create a pathway. A broker can assess whether bridging is appropriate for your situation and LVR position.
Non-bank lenders — not bound by APRA's cap
Non-bank lenders (non-ADIs) are not authorised deposit-taking institutions and therefore fall outside APRA's macroprudential guidance. Many continue to lend above 6x DTI based on their own credit risk frameworks. Rates and products vary, and a broker across the full panel — bank and non-bank — can identify competitive options where your DTI profile is accepted.
Frequently asked questions
Related guides
General advice warning: This information is general in nature and does not constitute personal financial or credit advice. Figures shown are indicative only — not guaranteed. You should consider your own circumstances and consult a qualified mortgage broker or financial adviser before acting on any information on this page. Michael Short (Credit Representative 468493) operates under Australian Credit Licence 389328.