Mortgage Insights | Mortgage wars set to reignite after cash rate cut
By PEXA • 29 Apr 2025
This report provides the latest mortgage trends for Australia’s mainland states of NSW, VIC, QLD, WA and SA, covering more than 95% of all property transactions nationally. It includes new loans arising for the purchase of a property and loans that are refinanced against all residential and commercial properties.
In this report, property settlements that are funded with a loan are defined as a ‘new loan’, regardless of whether a new or existing loan facility is used. Refinances include the refinancing of loans with a different lender, for example, taking out a new loan with another bank. They exclude the internal refinancing of a loan with the same lender, for example, rolling over an expiring loan to a new credit facility with the same credit provider.
Key Findings: Mar-25 Qtr
- 118,320 new loans were settled in the Mar-25 Qtr, 4.4% higher than the same period in the previous year.
- A total of $80.2 billion in new loans, of which $73.5 billion were for residential property, were settled in this quarter, an increase of 7.6% on the March quarter in the prior year.
- Refinancing activity, which had slowed in 2024, strongly picked up again in the Mar-25 Qtr, with 91,786 refinances settled, up 12.5% from the Mar-24 Qtr.
Australian macroeconomic drivers for new loans and refinances: Mar-25 Qtr
- A 25-basis point cut in the RBA’s cash rate will increase borrowing capacity for prospective homebuyers and reignite competition for mortgages. Although it may be too early to see the impact of the cash rate cut on new loan volumes, refinance volumes are quicker to respond. Many lenders have already responded by slashing their fixed-rate loans and some are beginning to offer cashback incentives.
- Housing finance for investors has grown faster compared to owner-occupiers. Over 2024, growth in the volume of new loan commitments for investors peaked in the Sep-24 Qtr, but recorded strong, double-digit growth throughout the year. By state, growth financing for investors was strongest in QLD, WA and SA and weakest in VIC. This reflects relative levels of where property prices have become more expensive. These state trends are expected to continue in the March quarter this year.
Seasonal drivers: Mar-25 Qtr
- NSW and VIC recorded the largest quarter-on-quarter falls compared to the Dec-24 Qtr, largely reflecting that the fact that the spring selling season is strongest in those states.
- It is unclear what impact Cyclone Alfred will have on the magnitude and timing of new loans and refinances, as it is difficult to uncouple these effects from the opposing seasonal variation in the Mar-25 Qtr. Both new loan and refinance volumes recorded double-digit growth compared to the same period in the previous year.
QLD has consistently recorded the highest volume of new loans since mid-2021
- Year-on-year growth in new loan volumes was highest in SA (+8.7%y/y) and lowest in WA (-3.2%y/y).
- The proportion of settlements with a loan was highest in VIC and WA (around 77%) and lowest in QLD (around 73%).
- Nationally, residential new loans grew by 4.2%y/y. Only NSW and WA recorded lower growth than the national average (+3.7%y/y and -3.2%y/y respectively).
- State by state trends in the commercial property sector reflect state property market performance in the residential sector, as the QLD property market has been much hotter than in NSW and VIC.
Loan values grew the most in VIC over the last quarter
- In line with median sale prices, median loan values in Greater Brisbane and regional QLD have grown the most over the past year (up 14.5%y/y and 13.5%y/y respectively).
Refinance volumes have rebounded amidst renewed competition for mortgages
- Nationally, refinance volumes grew by 12.5%y/y and were strongest in WA (up 27.8%y/y) and weakest in VIC (+3.9%y/y). VIC typically records the highest volumes of refinances across all states but has since been overtaken by NSW.
For further enquiries about this report or other property and mortgage insights, please contact us at research@pexa.com.au.
For media enquiries, please contact:
Liz Deegan – Senior Advisor, Cato and Clive
E: liz@catoandclive.com
M: +61 418 650 936
Clare Gill – General Manager, Corporate Affairs, PEXA
E: clare.gill@pexa.com.au
M: +61 467 284 154
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