Investor mortgage loans fell 12 per cent in January from a year earlier in a sign likely to give financial regulators confidence that curbs on lending have worked and can be wound back.

While the $11.9 billion-worth of property loan commitments to investors was 1.1 per cent above December's $11.8 billion, it marked a significant fall from the $13.5 billion of investor loans in January a year earlier, Australian Bureau of Statistics figures on Tuesday showed.

Loans to owner occupiers - excluding refinancing of existing loans - were little changed month on month but marked a 6.7 per cent increase from a year earlier to $14.8 billion.

First home buyer lending remains stronger than a year ago. Michele Ferguson

The slowdown in investor loans, which has accompanied a slowdown in the white-hot residential property markets of Sydney and Melbourne, and the continuing strength of owner-occupiers, will give further confidence to Australian Prudential Regulation Authority chairman Wayne Byres of his view -stated earlier this month - that the 10 per cent cap on growth in investor lending growth was 'reaching the end of its life'.

"Housing finance looks to be stabilising, both in terms of growth rates and types of borrowers," ANZ senior economist Jo Masters said. "Looking forward, housing finance for the construction of new dwellings looks to be plateauing, suggesting that building approvals may slow from midyear."