Loan commitments to first home buyers fell for the eighth consecutive month in September 2021 - 11.4% lower compared to September 2020 in seasonally adjusted terms.

Overall owner occupier loan commitments fell 2.7%. 

This is contrasted with investor lending, up 1.4% to $9.62 billion, with positive growth unbroken since October 2020.

The value of investment lending was 83% higher than a year ago, and close to records seen in April 2015 when investors borrowed $10.08 billion.

ABS head of finance and wealth, Katherine Keenan, said the average loan size for owner occupiers has grown, however.

"The value of new loan commitments for owner-occupier housing fell for the fourth month in a row, to $20.7 billion in September," Ms Keenan said.

"However, this was 21% higher compared to a year ago and 49% higher than pre-COVID levels in February 2020."

CommBank economists said lending to first home buyers is down 22.9% compared to the peak in January.

"Affordability constraints are biting in the first home buyer space, with dwelling prices rising by over 20% on an annual basis," they said.

NSW residents borrow big

NSW owner occupiers borrowed an average of $750,000 in September - a record high.

Across other states, Victoria led the falls in loan commitments, with owner occupier lending down 12.7% and first home buyers down 17%. 

Investment lending in Victoria, however, was up 1.4%.

"Similar to overall owner-occupier lending, the largest fall in the number of first home buyer loan commitments was in Victoria which fell 17%," Ms Keenan said.

"New South Wales fell 3.1%. Western Australia had the largest rise of 5.9%, while Queensland rose 2.1% and South Australia rose 4.3%."

Refinancing tapers

For owner occupiers, the value of external refinancing fell by just over $1 billion to $10.62 billion in September, in original terms. 

Internal refinancing also fell, down to $5.84 billion.

This made for an average refinancing value of just under $469,000. 

For investors it was much the same, with total refinancing down to $9.48 billion for an average value of $520,389.

Lendi Group CEO, David Hyman, said the ABS data shows only 7.4% of active mortgages had been refinanced over the past financial year.

"This lack of action could cost Australians down the line, when they finally come to the realisisation that the low rates they once overlooked are no longer on offer," Mr Hyman said.

"History dictates that interest rates will not stay this low forever, and mortgage holders need to start preparing for this. The recent rates are as good as we’re likely to see for some time, while we've already stared to see an uptick in fixed rates by some lenders."


Buying an investment property or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for investors.


VariableMore details
Refinance OnlyApply In Minutes
  • A low-rate variable investment home loan from a 100% online lender. Backed by the Commonwealth Bank.
Refinance OnlyApply In Minutes

Unloan – Variable Rate Investment Loan – Refinance Only

  • A low-rate variable investment home loan from a 100% online lender. Backed by the Commonwealth Bank.
VariableMore details

Athena – Straight Up Investor - Obliterate (LVR < 50%) (Principal and Interest)

    Important Information and Comparison Rate Warning

    Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of December 11, 2023. View disclaimer.

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