What are your options if you can’t get the finance you need to keep adding to your property portfolio?

For many experienced property investors, the biggest barrier to growth isn’t finding the next deal. It’s getting the finance approved. You have the equity, you have the experience and you have a track record of smart acquisitions – yet when you approach a major bank, you’re told your borrowing capacity has hit a wall. 

In many cases, the problem isn’t your portfolio but rather how banks assess it. 

Why good investors hit lending limits 

Most banks use conservative, one-size-fits-all rules when assessing experienced investors. These policies are designed for scale, not nuance. 

Traditional lenders apply strict serviceability calculations that often penalise experienced investors. Banks typically shade rental income by 20-30%, meaning they only count 70-80% of your actual rent when calculating serviceability. Combined with serviceability buffers – assessing loans at rates 3% higher than actual, according to what’s laid down by the Australian Prudential Regulation Authority (APRA) – many investors find their borrowing capacity severely restricted despite having strong cash flow in reality. 

Portfolio size restrictions add another layer of difficulty. Some lenders cap investors at four or five properties regardless of equity or income. Others apply stricter debt-to-income ratios once you cross certain thresholds.  

Additionally, from 1 February 2026, APRA will introduce a formal debt-to-income limit, allowing banks to write only 20% of new investor loans at six times income or more. While this may not affect all borrowers immediately, it creates another hard constraint that is expected to disproportionately impact investors, who typically operate at higher DTI ratios than owner-occupiers. 

Individually, all these rules may seem reasonable. Combined, they can significantly reduce borrowing capacity, even for well-managed portfolios. 

Are you asset-rich or genuinely overleveraged? 

When applying for finance for a new investment property, it is important you understand the difference between being asset-rich but income-constrained versus genuinely overleveraged. 

Many seasoned investors fall into the first category. They hold substantial equity and have properties that largely pay for themselves, but their personal taxable income doesn’t stack up under bank serviceability models. 

This is very different from a borrower whose cash flow is under pressure or whose portfolio relies on speculative growth to remain viable. 

Knowing which category you fall into is critical because the solutions are very different. 

Exploring alternatives beyond the major banks 

When traditional lenders say no, it doesn’t mean your growth has to stop. 

Depending on your circumstances, options may include: 

• Non-bank lenders: They will often assess serviceability more flexibly and place greater emphasis on asset position and cash flow. 

• Portfolio restructuring: This can include refinancing poorly structured loans or releasing equity more efficiently. 

• Debt consolidation: Simplifying repayments can improve overall servicing metrics. 

Loan structure matters more than most investors realise 

Sometimes, the solution isn’t a new loan, but a restructure of existing ones. 

You could consider a mortgage with an interest-only period. This can drastically improve your immediate cash flow and borrowing power.  

Or, resetting your loan term can reduce your monthly repayments, freeing up cash flow to improve your serviceability. 

Lender diversification is equally important. Spreading your loans across multiple lenders provides flexibility and protects against sudden serviceability rule changes. 

Improving your borrowing position 

Beyond switching lenders or changing loan structure, consider your overall finances. Improving borrowing capacity isn’t always about earning more. It’s often about how income and expenses are recognised. 

Make sure you are: 

• Ensuring all allowable rental income is captured 
   
• Managing cash buffers and offset accounts effectively 
   
• Working alongside accountants on tax structuring, entity selection and income timing 

Small adjustments here can materially change how lenders view your position. 

Think beyond the next purchase 

One of the most common mistakes investors make is focusing only on the next acquisition. 

Long-term portfolio planning considers where you want to be in five or ten years, how many properties you intend to hold and which lenders you’ll need along the way. 

Without this bigger-picture view, you can unintentionally block your own future options. 

How Finance Advisory Co can help 

Finance Advisory Co specialises in complex property finance scenarios that sit outside standard bank lending. 

We understand which lenders to approach, how to structure loans for maximum serviceability and how to keep portfolios moving when traditional options dry up. 

If you’ve hit a lending ceiling but know your investment portfolio has more potential, why not speak to a specialist investor finance broker at Finance Advisory Co? Contact me by calling 0426 236 007 or emailing ben@finad.com.au.  

Finance Advisory Co Pty Ltd (ABN 37 660  030 419) is a Credit Representative (CR No. 541104 of Connective Credit Services Pty Ltd (Australian Credit Licence 389328 ) 

This article is intended to provide general information only and does not take into account your objectives, financial situation or needs. While every effort has been made to ensure the accuracy of the information, it does not constitute legal, tax or financial advice and should not be relied upon as such. You should consider whether the information is appropriate to your circumstances and seek independent professional advice before making any financial decisions. All lending is subject to lender terms and conditions, fees, charges and eligibility criteria.