- Australia's two major non-bank lenders have raised their maximum loan amounts
- Firstmac and is online brand loans.com.au have raised the maximum loan amount on some home loan products to $3 million
- ASX-listed Pepper Money also announced it was tripling its maximum loan size and extending its lending policies
Australia's largest privately owned non-bank lender Firstmac and its online brand loans.com.au have raised maximum loan amounts as high as $3 million on some products.
For some loans.com.au home loans, it constitutes a $1 million jump across a range of variable- and fixed-rate products including owner occupier home loans where borrowers make principal and interest (P&I) repayments.
Owner occupiers opting for interest-only (IO) repayments will be limited to $2 million loans but that's also a jump of $1 million - a 100% increase.
Investors will also have access to the new $3 million loan cap on variable or fixed-rate loans regardless of whether they're making P&I and IO repayments.
The boosted loan ceilings do not apply to loans.com.au bridging, SMSF, or construction loans.
Parent company Firstmac also made more modest increases to its maximum home loan amounts over some loan-to-value ratio (LVR) and postcode categories.
Pepper also lifts loan sizes
It comes as ASX-listed non-bank lender Pepper Money also announced it was extending its lending policies, including tripling its maximum loan size to $3 million.
The new cap will also apply to loan-to-value ratios (LVRs) of up to 98%, a segment of the market where Pepper said it was looking to increase its lending.
Pepper's other moves to "expand its lending capability" include:
- increasing maximum LVR to 98% (including lender's protection fee) across all property locations, including high-density units
- making 95% LVR available to self-employed customers who generally require alternative loan eligibility (known as Alt Doc) assessments - Pepper claims this is a "market first"
- doubling loan sizes to $5 million for borrowers with 80% LVR
Pepper said it would also allow borrowers more property choice by lending on unit sizes from just 30 square metres.
Many lenders choose not to extend loans on certain property sizes, types, and locations, considering them high risk should borrowers default on their repayments with limited resale demand for them if they are repossessed.
The company said its new changes would allow mortgage brokers more options and "provide more ways to help customers move forward".
Why are lenders extending loan amounts?
It's likely no coincidence the largesse from non-bank lenders comes amid a significant slump in new mortgage demand.
Last week, credit reporting agency Equifax reported a 14% slump in new home loan applications in June compared to a year ago.
First homebuyer applications took an even bigger hit with a downturn of 17.2%.
The June figures compound falls of 6.6% and 9.1% respectively in May.
Equifax analysis attributes the dramatic slide to high interest rates after three cash rate increases in 2026, as well as housing investor tax changes in the May federal budget.
What are banks doing?
Banks have also been hit by the dramatic slowdown in property sales and new home lending.
In the weeks after the federal budget, Australia's second-largest home lender Westpac announced its investor loan applications had dropped 20% in just three weeks.
Last week, NAB lowered its shorter-term fixed home loan rates, following Macquarie Bank and ANZ in June.
Other banks are looking to their deposit products to keep some cash rolling in while lending demand falters.
On Monday, ING launched a new savings account, touted as the biggest change to its savings products in 18 years.
Last week, AMP Bank rejigged its successful online-only GO Save offering little over a year after its launch.
In an April statement to the ASX, AMP said it was "looking to reduce the amount of capital the bank consumes" given its "steady" loan book.
Non-bank lenders generally don't have deposits to offset falls in their lending books, instead having to adjust their loan offerings in a bid to attract new business.
Making more credit available to more potential borrowers is one way to lure new lending.
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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| 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 |
