Property investors seeking to borrow many times their income are tipped to come under increased scrutiny, as banks respond to regulatory pressure to restrict higher-risk mortgage lending.

Following a direction from the Australian Prudential and Regulation Authority (APRA) in April, banks are grappling with how to set what the regulator calls "internal risk appetite limits" on new lending to customers borrowing more than six times their income.

APRA told banks in April to develop limits on lending where the debt is more than six times the borrower's income. Credit:Rob Homer

APRA told banks to develop such policies a month and a half ago, and gave them an incentive to do so. It will only lift a 10 per cent limit on housing investor credit growth when banks have limits in this area, as well as other "sound" lending policies and practices.

Commonwealth Bank has in recent weeks told mortgage brokers it will monitor loan applications with a debt-to-income ratio above 4.5 times, while those with ratios of seven times or higher will have to be approved manually by credit departments.