As election season approaches, industry leaders say borrower confidence and market sentiment — not political promises — are often the biggest influences on mortgage activity and lending decisions
Election years often bring an added layer of uncertainty to financial markets, and while housing and lending policies can become major talking points on the campaign trail, the reality for mortgage advisers is often more nuanced.
However, according to industry leaders, the impact is rarely as direct as many borrowers assume. Instead, advisers play a critical role in helping clients navigate the noise, focus on what they can control, and make informed lending decisions regardless of the political landscape.
Why some borrowers take a wait-and-see approach
One of the most noticeable impacts of an election year is a temporary shift in borrower confidence. Glenn McLeod (pictured, right), Head of Link Advisory, says election periods can cause some to pause major financial decisions while they wait for greater clarity around policy direction.
"In the lead-up to an election, we usually see things slow slightly as when there is uncertainty around where policy might land, especially around housing or investment, people can hesitate or delay decisions."
However, McLeod is quick to point out that elections seldom bring the market to a standstill.
"it is rarely a full stop. Most clients still move based on their own needs and timing. Elections can influence sentiment, but they do not tend to override personal drivers like family, income or life changes."
Baden Martin (pictured, left), General Manager of Lending at Liberty Financial, agrees. "Elections tend to introduce a collective pause," he says. "Through our advisers, we see a proportion of borrowers, particularly purchasers rather than refinancers, adopt a wait-and-see mindset as polling day approaches."
Yet life continues regardless of political cycles.
"People still change jobs, grow families and need to move," says Martin. "What typically follows is a compression of activity, where decisions are deferred and then brought forward after the election."
For advisers, this can mean quieter periods followed by sudden increases in activity once uncertainty begins to ease.
Political promises versus lending fundamentals
Election campaigns often feature significant discussion around housing affordability, tax settings, first-home buyer support and property investment rules. But do these policy announcements actually influence lender behaviour?
According to both McLeod and Martin, the answer is generally no.
"Policy direction matters, but in the short term it is sentiment and confidence that tend to have the bigger impact," says McLeod. "Ahead of an election, a lot of what we hear is still evolving, so lenders are not typically reacting to announcements alone."
Martin echoes that view. "Lenders do not materially restructure credit policy in response to political announcements," he says. "Credit settings are shaped by Reserve Bank policy, funding costs, arrears performance and broader economic conditions."
Instead, policy discussions tend to influence borrower confidence more than lender appetite.
"Policy announcements can influence borrower confidence, particularly around areas like tax settings or first-home support, and that flows through to application volumes via advisers," says Martin.
For mortgage advisers, this distinction is important. While clients may be concerned about campaign promises and political rhetoric, the fundamentals of lending typically remain driven by economic conditions rather than election outcomes.
The role of advisers: Helping clients navigate uncertainty
Periods of political uncertainty can often amplify borrower anxiety, particularly when combined with ongoing discussions around interest rates and housing affordability.
Which is why McLeod believes advisers add the greatest value when they help clients focus on their individual circumstances. "A big part of the role is helping clients stay grounded in what they can control," he says. "During election cycles, there is a lot of noise, and clients can get caught up in what might happen."
That often means separating fact from speculation.
McLeod adds: "We focus on clear, practical conversations. That means understanding what is driving their hesitation, correcting any misinformation, and bringing it back to their own goals and financial position."
Martin says advisers can also reduce uncertainty through careful loan structuring and scenario planning. “From a lender perspective, our role is to support that process by providing clarity and flexibility. This can include scenario-based servicing assessments or structuring options that allow for different outcomes.
"When borrowers can clearly see how their position holds up across a range of rate environments, uncertainty tends to reduce. While no one can reliably predict elections or OCR movements, well-structured lending can remain resilient.”
Do elections affect lender appetite?
A common concern among borrowers is whether lenders become more conservative during election periods.
"In most cases, lending policy stays pretty consistent through election cycles," says McLeod. "Banks are more influenced by things like funding costs, interest rates and regulation than by the election itself."
While Martin agrees, he does note there can occasionally be subtle shifts around the margins. "Some conservatism can emerge at the margins, particularly in areas like investor lending or more complex deal structures."
Leaning into opportunity during uncertain times
While election years can create challenges, they can also create opportunities for advisers who position themselves as trusted sources of guidance, with McLeod saying a ‘slower period’ can allow space for deeper conversations.
"When there is uncertainty, people value clarity and reassurance. If you can provide that, it builds trust and often sets you up well when confidence returns."
However, Martin warns the impact of this year’s election could differ from previous years, given the instability of the current global environment.
He says: “The backdrop is different. In previous cycles, conversations were more focused on domestic policy settings. Today, factors such as geopolitical uncertainty, offshore economic decisions, and funding market volatility are all influencing borrower confidence and funding costs – the election sits within that broader context.
“Even a clear outcome may not deliver the same level of confidence seen in more stable periods. So advisers are increasingly focused on structuring lending that is resilient across a range of scenarios rather than relying on any single expected outcome”
For advisers, the key is remaining visible, communicative and focused on helping clients make decisions based on facts rather than headlines. And as international uncertainty continues to influence markets alongside domestic political developments, that role will become more important than ever.
