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Australian Mortgage Market Sees 6.8% Growth in New Home Loans for FY25

Interest Rate Cuts and Refinancing Boom Drive Home Loan Activity

Australian Mortgage Market Sees 6.8% Growth in New Home Loans for FY25?w=400
The Australian mortgage market experienced a significant uplift in the fiscal year 2025, with new property-backed loans increasing by 6.8% compared to the previous year.
This growth is primarily attributed to recent interest rate cuts, improved housing affordability, and enhanced support for first-time homebuyers.

According to PEXA's latest industry report, a total of 544,630 new property-backed loans were settled in FY25, with residential loans comprising 96% of this total. This surge in new loans outpaced the 3.2% growth in overall property settlements, indicating a higher reliance on financing among homebuyers amid tighter household budgets and stronger first-home buyer incentives.

Victoria led the nation in new mortgages, recording 148,126 loans settled, followed closely by Queensland with 146,157, and New South Wales with 142,653. Both Victoria and Western Australia had the highest loan-attached settlement shares at 77.2%, reflecting strong demand in these regions.

The total value of new lending settled over the financial year reached $380.6 billion, including $346.4 billion in residential loans, representing a 14% annual rise. This trend aligns with continued growth in Australian property prices, driven by limited housing supply, strong investor demand, and expectations of further rate cuts later in 2025.

Refinancing activity also gained momentum, particularly in the second half of FY25, as borrowers sought better deals following interest rate reductions. Refinance settlements rose by 1.1% over the year to reach 401,114 nationally, with a notable 20.3% quarter-on-quarter increase in the June 2025 quarter.

For Australian homeowners and prospective buyers, these developments suggest a dynamic mortgage market with opportunities for securing favorable loan terms. Staying informed about interest rate trends and exploring refinancing options could be beneficial in optimizing mortgage arrangements.

Published:Wednesday, 15th Oct 2025
Source: Paige Estritori

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