DTI over 6: can you still get a home loan in 2026?
APRA's 2026 DTI cap explained, and what to do if your debt is over six times your income.
Short answer
Yes. Since 1 February 2026, APRA has limited banks to writing no more than 20% of new loans at a debt-to-income ratio of six or more, but it is a cap on volume, not a ban. Lenders apply it very differently, and non-bank lenders sit outside it, so choosing the right lender often decides whether your loan goes ahead.
What is a debt-to-income ratio?
Your debt-to-income ratio (DTI) is your total debt divided by your gross annual income. If your household earns $150,000 before tax and owes $900,000 across all loans and credit limits, your DTI is 6.0.
Lenders count the limits on your debts, not just the balances. A credit card with a $20,000 limit counts as $20,000 of debt even if you pay it off every month. Most lenders include home loans, investment loans, car loans, personal loans and card limits. How each lender treats things like HECS can vary, which is one reason two lenders can calculate a different DTI for the same person.
| Gross household income | Debt at a DTI of 6 |
|---|---|
| $100,000 | $600,000 |
| $150,000 | $900,000 |
| $200,000 | $1,200,000 |
| $250,000 | $1,500,000 |
| $300,000 | $1,800,000 |
What changed on 1 February 2026
From 1 February 2026, APRA (the Australian Prudential Regulation Authority) limited banks and other authorised deposit-taking institutions to writing no more than 20% of their new home lending at a DTI of six or more.
- It is a cap on volume, not a ban. Lenders can still approve loans above six times income. They just cannot let those loans exceed 20% of what they write.
- Owner-occupier and investor lending are measured separately. Investors cannot crowd out home buyers, and the reverse.
- It is checked quarterly. A lender that writes a lot of high-DTI loans early in a quarter can run out of room later in it.
- Some loans are excluded, including bridging loans for owner-occupiers and loans to buy or build new dwellings.
- It applies to deposit-taking lenders. Non-bank lenders are not bound by APRA's cap, although they set their own DTI policies.
Why property investors hit DTI limits first
Investors with two or three properties reach six times income quickly. Every investment loan adds its full balance to your debt, but lenders only count part of the rent as income, and some do not count it at all towards DTI. Add a home loan and a car loan, and a household on a solid income can sit above six without any trouble paying the bills.
A high DTI does not mean you cannot afford the loan. It means a lender has to decide whether to use part of its limited high-DTI allowance on you.
What lenders actually do above a DTI of six
Lender policy varies far more than most borrowers expect. On a recent investor scenario we ran across our panel, the responses fell into four groups:
- Hard stop: some lenders treat a DTI of six as an absolute limit at every loan-to-value ratio.
- Case by case: some will consider it, usually with stronger evidence of income and expenses.
- Conditional: some will only proceed if the net surplus after all repayments clears a minimum, or after a discussion with their credit team.
- Policy-led non-banks: some non-bank lenders assess the deal on its merits, often with a higher rate.
A real example: one borrower, 30+ lenders
For one investor with three properties, a DTI of about 6.4 and a proposed $400,000 investment loan, the maximum each lender would lend ranged from about $47,000 to about $690,000. Same person, same income, same properties. The difference came entirely from each lender's policy on buffers, rental income, living costs and DTI.
Several major banks showed a monthly shortfall, while a handful of non-bank and tier 2 lenders showed a comfortable surplus. That is why lender selection, not just rate, decides whether a high-DTI loan happens.
Six ways to move forward if your DTI is over six
- Match the lender to the deal. Choose lenders whose DTI policy and remaining capacity suit you, rather than applying to your current bank by default.
- Cut unused credit limits. Closing or reducing card limits lowers your DTI immediately.
- Document every dollar of income. Bonuses, overtime and rent that are not evidenced do not count.
- Restructure existing debt. Consolidating or refinancing can improve servicing even when DTI stays the same.
- Review underperforming assets. Selling a low-growth property can free up both equity and DTI headroom.
- Watch timing. Because the cap is measured quarterly, lender appetite can change during the year.
If you are planning your next purchase, read how much more you can borrow as an investor and why lenders cut your borrowing power.
How Rate Engine helps
We compare 30+ lenders, including big four, tier 2, customer-owned and non-bank lenders, and match your scenario to the lenders most likely to say yes. It costs you nothing, and on loans of $1M or more we pay you $1,000 cashback on top of any lender cashback. See our investment loan service or book a call.
Frequently asked questions
Is the 20% cap applied to me personally?
No. The cap applies to each lender's total new lending, not to individual borrowers. You can still be approved above six times income if the lender has room and you meet its policy.
Do non-bank lenders follow APRA's DTI cap?
APRA's cap applies to authorised deposit-taking institutions such as banks and credit unions. Non-bank lenders are not bound by it, but they must still meet responsible lending obligations and set their own limits.
Does a DTI over six mean I cannot afford the loan?
Not necessarily. DTI and serviceability are separate tests. You can pass a lender's serviceability calculation comfortably and still have a DTI above six.
How do I lower my DTI quickly?
Reduce or close unused credit card limits, pay out small debts such as car loans, and make sure all of your income is documented so it is counted.