Brokers chase better deals for clients as serviceability limits switching
Refinancing made up a record 57% of Loan Market Group’s mortgage lodgements in the last two weeks of September, as borrowers looked for cheaper rates. New lending, meanwhile, kept falling, with investors pulling back hardest.
The aggregator’s October 2026 market report shows that once refinancing is stripped out and the data is seasonally adjusted, the value of new mortgage lodgements is 24% lower than at the end of January. That was just before the Reserve Bank (RBA) began raising rates in February, and before the May 2026 federal budget changed the tax treatment of property investment.
Total lodgements, including refinancing, rose 10% in September from their July low, helped by the usual spring pick-up. But the report cautions that the headline bounce masks continued weakness, noting “there has been no recovery in underlying mortgage activity”.
Investors bear the brunt
Investor lodgements are down 45% by value since the end of January, and 23% since the end of June. Owner-occupier upgraders are down 16%, and first-home buyers 13%. Applications from first-home buyers and upgraders have since steadied.
The gap between new and established property is stark. Investor demand for existing homes, which lose negative gearing for purchases made after the May 2026 budget, has dropped 56%, compared with a 10% fall for new homes, which keep the tax break.
Official figures show a similar skew. Ray White chief economist Nerida Conisbee’s analysis of Australian Bureau of Statistics lending data for the June quarter found roughly 16 fewer investor loans were written for established homes for every extra one written for a new home.
Queensland and NSW lead the slowdown
Since the end of January, total new lodgements have dropped 30% in Queensland, 29% in New South Wales, 26% in South Australia, and 20% in Victoria. Western Australia and the rest of Australia (Tasmania, the ACT, and the Northern Territory) each recorded falls of 11%. Loan Market Group notes that the smaller states’ figures aren’t seasonally adjusted because their samples are smaller.
Refinancing share hits a record
Refinancing has climbed steadily as a share of lodgements since the RBA started hiking in February. The report links the trend to brokers shopping for better deals on clients’ behalf, and to banks discounting more over recent months.
It describes the result as “an increase in mortgage churn, with brokers helping customers find better mortgage deals”.
Not every borrower can make the switch, however. Equifax found demand to refinance with a new lender fell 8.8% year on year in September 2026, with serviceability tests keeping many borrowers with their current lender.
Brokers are seeing it first-hand. The Mortgage & Finance Association of Australia’s August 2026 market sentiment survey found 49.2% of brokers had more clients unable to refinance because of serviceability, more than double the share six months earlier, as brokers turn to 1% refinance buffers and lender retention offers.
