Experian data shows new home loan demand fell 13% in July
Australian mortgage holders are keeping up with repayments despite a weakening jobs market and falling home prices. Demand for new home loans, however, has dropped sharply, according to Experian’s October 2026 Business Pulse Monthly report.
Mortgage delinquencies of 30 days or more stood at 0.67% in July, 3 basis points lower than a year earlier, and have held broadly flat throughout 2026. Experian’s analytics team said there had “not yet been a material deterioration in mortgage or credit card repayment performance”.
Loan demand falls away after a strong first half
The resilience in repayments contrasts with a sharp drop in new borrowing. Experian’s bureau data shows new home loan demand ran strongly until June, then fell 13% in July and 11.2% in August, pushing its index below baseline levels. The decline is consistent with Equifax data showing mortgage demand fell 19.2% year on year in September 2026.
The slowdown is recent. Australian Prudential Regulation Authority (APRA) figures cited in the report show new mortgage funding reached $199.8 billion in the June quarter, 24% more than a year earlier. More recent figures point the same way: Canstar analysis of APRA’s September banking statistics shows the value of mortgages held by authorised deposit-taking institutions grew just 0.3% for the month, half the pace of a year earlier. Australian Bureau of Statistics (ABS) data puts the average owner-occupier loan at $731,000, down slightly over the June quarter but 7.8% higher than a year ago.
Share of riskier lending eases
The mix of new lending has shifted slightly away from riskier loans. Loans at six times the borrower’s income or more made up 5% of new funding in the June quarter, down from 6% in the March quarter. Loans with a loan-to-value ratio between 80% and 90% fell for a third consecutive quarter to 22%, while the share at 90% or above held at 8%.
Labour market emerges as the key risk
ABS data shows unemployment rose to 4.7% in September, its second consecutive monthly increase, as the number of employed people fell by 39,300. The Reserve Bank of Australia (RBA) lifted the cash rate to 4.6%, its fourth increase of the year. A fifth may follow, with CommBank economists forecasting a rise to 4.85% on 3 November and expecting higher unemployment than previously forecast as rates bite. Consumer sentiment fell to 68.0 in October after the RBA’s latest rise, according to the ANZ-Roy Morgan survey.
Unsecured credit is showing the earliest strain. “Personal loans remain the area to watch,” the report said. Personal loan delinquencies reached 3.4% in August, 36 basis points higher than a year earlier, while credit card delinquencies eased to 0.81%.
Steady mortgage repayments offer brokers some reassurance. However, with unemployment rising and borrowing capacity under pressure, serviceability tests are locking some borrowers into their current loans.
