Mortgage Insights | Cheaper financing & government support drive resurgence in home loans

This report provides the latest mortgage trends for Australia’s mainland states of NSW, VIC, QLD, WA and SA, covering more than 95% of all property transactions nationally. It includes new loans arising for the purchase of a property and loans that are refinanced against all residential and commercial properties.  

In this report, property settlements that are funded with a loan are defined as a ‘new loan’, regardless of whether a new or existing loan facility is used. Refinances include the refinancing of loans with a different lender, for example, taking out a new loan with another bank. They exclude the internal refinancing of a loan with the same lender, for example, rolling over an expiring loan to a new credit facility with the same credit provider. 

Key Findings: Financial Year 2025

• 544,630 new property-backed loans were settled in FY25, 6.8% higher than in FY24. 521,750 of these loans (96%) were attached to a residential property. This surpassed growth in property settlement volumes over the same period (up by just 3.2%y/y), indicating that a greater proportion of property settlements required a loan. This reflects several factors that mean more new homebuyers need to finance their purchase with a loan.
• Although QLD had the highest number of total property settlements in FY25, VIC had the highest number of new mortgages, with 148,126 new loans settled in FY25. This likely reflected the differences in the composition and financial situation of buyers across these two states.
• In aggregate value terms, a total of $380.6 billion in new loans was settled in FY25, of which $346.4 billion were for residential property, an increase of 14.0% from FY24.
• Refinance volumes marginally improved from the previous financial year, up by 1.1% to 401,114 refinanced loans in FY25. 

Key Findings: June quarter 2025

• In the Jun-25 Qtr, new loan volumes continued to grow faster than overall settlement volumes, as more properties are settled with a loan (as opposed to cash purchases). New loan volumes increased by 21.1%q/q, compared to 20.2%q/q growth in total settlement volumes.
• In the Jun-25 Qtr, refinance volumes increased 20.3%q/q and 20.1%y/y. Refinance settlements were much stronger in the second half of FY25 compared to the first half, aligned with the timing of the RBA cash rate cuts. Borrowers have more opportunities to find better deals as lenders adjust their mortgage rates after each cut. 

Australian macroeconomic influences on new loans and refinances: Jun-25 Qtr

• The RBA cut cash rate twice during FY25, with a 25-basis point reduction in each of February and May 2025. These cuts helped to support household sentiment, consumption, home purchases and savings rates, all of which improved in the Mar-25 Qtr National Accounts data and other more recent indicators. 
• Labour market resilience has been a key strength in Australia’s property market in FY25. Adult population growth moderated from recent peaks, although the unemployment rate ticked up (4.3% in June 2025) jobs growth remained robust (2.1%y/y to June 2025). Wage inflation (3.4% in March) moved back above consumer inflation (2.4% in March) so that real incomes are recovering. This strength was a key reason why mortgage arrears rates stayed low and home prices resumed rising, despite ongoing concerns about the ‘cost of living’ through FY25. Stable employment and income are required for most purchasers to qualify for a loan. 

In addition, a number of government policy changes had an impact on particular segments or locations within Australia’s property market during FY25, such as the ban on foreign property purchases. However, government buyer support is mainly focussed on first home buyers, who almost always need a loan to finance their purchase. These supports include those listed in Table 2. 

Over 544,000 new loans were settled in FY25, an increase of 6.8% from FY24

• VIC recorded the highest volume of new loans in FY25 (148,126), followed by QLD (146,157) and then NSW (142,653). VIC and WA consistently have a higher share of settlements with a loan (both 77.2% in FY25), suggesting structurally higher first home buyer activity in those states. 

• In FY25, growth in residential new loans was strongest in SA (+9.2%y/y) and VIC (+8.4%y/y). 

• Commercial new loans outpaced growth in residential new loans in FY25, as the commercial sector grew by 13.1%y/y and the residential sector grew by 6.6%y/y.
• The commercial property sector had been relatively sluggish since work-from-home has lessened demand for office spaces and for businesses that cater to that workforce.  

Median loan values grew by the most in Brisbane and least in Greater Melbourne

• NSW remained the most unaffordable state, as buyers in Greater Sydney took out the largest loans (median value $800,000, +5.2%y/y). Those that sought relatively more affordable properties in regional NSW are now taking out larger loans than those buying in Greater Melbourne.
• The relatively affordability of Melbourne is driven by stagnant house prices and a healthy increase of new supply dwellings. The median loan value at the end of FY25 grew by 4.7% to $555,000 in Greater Melbourne and by 6.7% to $419,000 in regional VIC.
• Median loan values in QLD grew the strongest over FY25. In regional QLD, the median loan increased by 15.1%y/y to over $525,000, whereas the median loan for those buying in Greater Brisbane grew by 12.6%y/y to $640,000. 

Growth in refinance volumes has diverged across the states

• Refinancing activity peaked in VIC in FY23, and therefore, refinance settlement volumes have fallen in every consecutive year. In FY25, refinance volumes again slipped by 7.7%y/y.
• Conversely, refinance growth has been strong in WA (+14.7%y/y), QLD (+7.5%y/y) and SA (+5.9%y/y). 

The aggregate value of refinances hit a new peak in the Jun-25 Qtr

• Unsurprisingly, growth in aggregate value of refinances was strong in the same states that recorded strong volume growth. 

For further enquiries about this report or other property and mortgage insights, please reahc out to our Research team.

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