Non-ADIs issued $10.49 billion in new home loans in Q2, far outpacing growth among traditional lenders
The value of home loans issued by non-bank lenders in Australia rose 65.2% year-on-year in the June 2026 quarter, according to new analysis of Australian Bureau of Statistics Lending Indicators data published by Money.com.au.
Non-bank lenders — defined by the ABS as non-authorised deposit-taking institutions (non-ADIs) — issued $10.49 billion in new home loans in the quarter, up from $6.35 billion in the same period the previous year, a rise of $4.14 billion.
Over the same period, new home lending by major banks and other ADIs, including credit unions and building societies, grew just 2.6%, from $85.41 billion to $87.61 billion.
Non-bank lenders now account for 10.7% of the value of new home lending, up from 4.8% when the ABS series began in September 2019. Their market share has risen steadily since mid-2023.
The growth occurred even as the broader mortgage market contracted. The value of total new housing loans fell 5.2% from the March to June quarter, while non-ADI lending rose 3.2% over the same period, from $10.16 billion to $10.49 billion.
| Lender type | June 2025 qtr | June 2026 qtr | Increase | YoY change |
|---|---|---|---|---|
| Non-bank lenders (non-ADIs) | $6.35bn | $10.49bn | $4.14bn | 65.2% |
| Major banks + other ADIs (e.g. credit unions) | $85.41bn | $87.61bn | $2.2bn | 2.6% |
Source: ABS Lending Indicators, June quarter 2026. Figures are the value of new housing loan commitments to households, seasonally adjusted, and exclude refinancing. Lender-type series are seasonally adjusted independently of the headline total, so figures may differ slightly from the total published by the ABS. Analysis: Money.com.au.
Nick Burgess (pictured right), mortgage expert at Money.com.au, attributed the shift in part to regulatory differences between bank and non-bank lenders. "Non-bank lenders sit outside APRA's prudential rules, including the 3% serviceability buffer banks have to apply," he said. "Most still apply a buffer of their own, but it's often lower, which can mean more borrowing capacity than you'd get from a traditional bank.
"This matters more than ever as this year's rate rises, reduced borrowing power and tighter lending conditions for investors following the Federal Budget have squeezed how much people can borrow. These factors are pushing more borrowers to look beyond traditional banks, and that's reflected in the growing value of home loans being issued by non-bank lenders."
Burgess also noted that lending policy flexibility was drawing borrowers who do not meet standard bank criteria.
"Mainstream banks generally have fairly rigid lending policies, and not every borrower fits neatly inside that box," he said. "Someone who's self-employed or has a blemish on their credit report, for example, may find they have more options outside the traditional banking system.
"There's also a perception that going to a non-bank means paying a higher interest rate, but that's not always the case. Some online non-bank lenders are very competitive on price, particularly for straightforward borrowers with good equity. It's generally at the specialist end of the market, where borrowers have credit issues or complex income, that you're likely to pay more because the lender is taking on more risk."
On the divergence between non-bank and overall lending trends, Burgess said: "If every type of lender was growing at roughly the same rate, you could put it down to an overall increase in the value of new home lending. That's not what we're seeing. The value of non-bank lending has continued to grow while the overall value of new home lending has gone backwards in the latest quarter. The big question is whether this is a temporary response to current lending conditions or the beginning of a more permanent shift in where Australians get their home loans."
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