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Demand for mortgages rose sharply in the September quarter as the August cash rate cut helped drive the strongest year-on-year growth in mortgage applications since 2021, according to credit bureau Equifax.
The Equifax Quarterly Consumer Credit Insights report – which measures the volume of mortgages, credit cards, personal loan applications, buy now, pay later, and auto loan applications that go through the Equifax Consumer Credit Bureau by financial services credit providers – found that mortgage applications soared 10.3 per cent between September 2024 and September 2025.
First home buyer demand climbed, with the largest volume of inquiries seen since the first quarter of 2022.
The rise came ahead of the launch of the refreshed 5 per cent deposit scheme, aimed at supporting first home buyers (FHBs).
Equifax chief solution officer Kevin James noted an uptick in property-buying intention among younger demographics, but warned of persisting affordability challenges.
“It’s important to remember that while first home buyers have access to incentives such as the government’s 5 per cent deposit scheme, it is not enough to close the gap for many,” James said.
“With rising house prices demanding higher loan-to-value ratios, the barriers to entry persist – regardless of the applicant’s deposit size or credit quality.”
However, total mortgage accounts declined annually for the second consecutive quarter, likely driven by affordability challenges. Active mortgage accounts fell 0.8 per cent compared to a year earlier.
The Equifax figures echo those reported by the Australian Bureau of Statistics this week, which revealed that the total number of new mortgages rose 6.4 per cent in the September quarter to 141,470, while the value rose 9.6 per cent to $98.0 billion.
Lending to first home buyers (FHBs) grew during the September quarter, according to the ABS, with the number of owner-occupied loans for FHBs up by 667 loans (2.3 per cent) in the September quarter, and 0.9 per cent through the year.
However, investor lending has skyrocketed recently, with the ABS data showing that investor lending accelerated by 13.6 per cent to 57,624 in the September quarter, resulting in growth of 12.3 per cent through the year.
This is the largest number of investor loans on record, beating the previous record achieved in the March quarter 2022 (when 52,787 investor loans were written).
Consumer lending surges
Beyond mortgages, Equifax revealed that demand for credit products was up across the board.
Personal loans recorded their strongest year-on-year growth since 2022, with applications up 11.6 per cent.
Credit cards posted a second consecutive quarter of double-digit growth, with applications growing 13.3 per cent.
Buy now, pay later (BNPL) applications rocketed 43 per cent year on year, boosted by new regulations coming into force in June. BNPL accounts jumped 18 per cent compared to a year earlier.
“The spike in BNPL accounts is attributable to the 10 June legislative changes,” James said.
“Because this segment is now reporting under the same requirements as other lenders, we are getting a fuller picture of its true reach. Therefore, I expect this growth to plateau over the next few quarters.”
Other reasons for an acceleration in credit products include buoyed consumer sentiment and more people accessing finance before the holiday period.
[Related: Brokers tip first home buyer demand to rise]
