Rising refinancing activity cut mortgage costs by up to $2,000 a year, banking group reports
Australian banks have supported more than 670,000 first home buyers into the property market over the past five years, according to a new report commissioned by the Australian Banking Association (ABA).
The report, which highlights how Australian banks power the economy, found that strong competition across the sector is saving mortgage holders up to $2,000 a year in interest repayments.
Construction lending helped deliver 110,000 new homes in the past year, and more than 640,000 mortgage holders are refinancing annually — a figure the ABA said reflects falling barriers to switching lenders and a more competitive market.
The ABA said evidence showed switching lenders could save the average household up to $2,000 annually in interest repayments, or $60,000 over the life of a loan.
The ABA report also found that 65% of Australian banks are now owned by households — either directly through shares or via superannuation — with that investment rising from $240 billion in 2010 to $470 billion today.
Lending to small and medium businesses reached approximately $180 billion in new credit in 2025, an increase of 82% since 2020. Agricultural sector lending rose 41% to $141 billion over the same period. The ABA said business lending generated $110 billion in economic activity last year and supported more than 580,000 jobs.
Number of first home buyers supported by loans 
Source: Australian Banking Association
"Banks have helped over 670,000 first home buyers realise the dream of home ownership in the past five years, while supporting the construction of over 110,000 new homes last year," said Simon Birmingham (pictured right), chief executive of the Australian Banking Association.
"Australia has one of the strongest banking sectors in the world. Strong banks allow for more lending for people to buy homes, credit for businesses to grow and more capacity to support community initiatives such as disaster relief."
On competition in the mortgage market, Birmingham said refinancing activity demonstrated the market was functioning effectively for borrowers.
"Households with mortgages have been the big beneficiaries of a highly competitive banking sector," Birmingham said. "Strong competition amongst banks is seeing more than 640,000 mortgage holders refinance their home loans each year.
"High refinancing rates show that barriers to changing banks have come down, while competition has gone up, with evidence showing that switching can save the average household up to $2,000 a year in mortgage interest payments. It pays to check with your bank to see if you can get a better deal or even shop around.
"This competition has also extended to small business lending with credit becoming more affordable. Lower borrowing costs supports more investment, more jobs and more output from this crucial part of the economy."
Birmingham also noted the broader economic significance of household ownership of the banking sector.
"This isn't a well known fact, but Australian households now own 65% of Australia's banks, be it directly through personal investments such as shares or their super," he said. "The value of investments by households in Australian banks has nearly doubled from $240 billion to $470 billion over the last 15 years. Ensuring our banks remain strong and profitable will deliver better retirement incomes back to households."
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