Mortgage demand plunges, first homebuyers hardest hit
Home loan applications were down 14% in June compared to a year ago with first homebuyer demand falling even further.
- Home lending continues to plummet across Australia
- First homebuyers are leading the downturn, with their loan applications dropping more than 17% compared to June last year
- Demand for other forms of credit, including credit cards and personal loans, is also sliding
First homebuyer loan applications plummeted 17.2% year on year, effectively killing momentum sparked by the federal government’s expanded 5% Deposit Scheme.
June data from credit reporting agency Equifax showed younger demographics are driving the steep downturn in overall mortgage demand across the country.
The June figures are the first full monthly data released after the federal budget’s housing tax changes and compound a 6.6% decline in overall home lending in May.
First homebuyers also led the May plunge with a 9.1% fall in new mortgage applications.
The latest data covers the June cash rate hold after three consecutive rate increases in 2026 but that appears to have had no effect on halting the slide.
Queensland leads first homebuyer retreat
Queensland continued to record the steepest drop-off in first homebuyer loans, down 20.8% year-on-year in June after a 16.2% plunge in May.
Victoria saw a 18.2% decline while Tasmania was the most resilient first homebuyer market in June, recording a 9.9% fall.
But it was the ACT that led the plunge in mortgages overall, down 18.6% last month compared to June 2025, ahead of Victoria (-15.9%) and New South Wales (-15%).
Western Australia had the most robust mortgage market with demand declining in single digits at 8.5%.
Equifax’s data is taken from lender inquiries about the credit histories of potential borrowers when they make loan applications.
Mortgages not the only sector hit
While home lending saw the biggest plunges, demand for other forms of credit also fell away.
Credit card demand recorded its third consecutive monthly drop (-2.8%) for the first time since 2022 while personal loans also dipped into negative territory for the first time in 18 months.
Again, Western Australia stood alone as the clear outperformer among the states and territories with only a marginal decline in credit card applications while personal loan demand increased by 7.1%.
Across the country, car loans also recorded a 1.3% annual decline in June, although demand in the 56+ age group saw a 4.6% increase.
Generational divide
Equifax analysis noted a clear divide in the credit landscape, with under-35s accessing less credit across the range of products.
“This retreat stands out clearest in new mortgage applications, where demand from the 26-35 age group has effectively hit a wall, dropping 20.5%,” the company said.
“The older cohort generally holds more unencumbered wealth and lower debt leverage insulating them from the immediate friction of current cash rates.”
Equifax said it’s clear the “proactive risk management” Australian households observed earlier in the year has evolved into a “far more conservative, defensive approach to borrowing”.
“Facing a cumulative ‘double whammy’ of persistent cost-of-living constraints and a sustained high interest rate environment, households appear to be responsibly choosing to preserve liquidity and actively curb their exposure to new doubt commitments.”
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| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.99% p.a. | 6.02% p.a. | $2,995 | Principal & Interest | Fixed | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
5.93% p.a. | 5.93% p.a. | $2,975 | Principal & Interest | Variable | $0 | $395 | 70% | Disclosure |
