The Australia mortgage lending market size was valued at USD 32,525.03 Million in 2025, according to IMARC Group. The market is projected to reach USD 47,081.16 Million by 2034, growing at a CAGR of 4.20% during 2026-2034.

Growth is driven by the first interest rate-cutting cycle in over five years, fuelling buyer confidence and refinancing. Expansion of the federal 5% deposit scheme helps first-home buyers, while persistent housing supply shortages support lending volumes. AI adoption across underwriting and customer service is expanding market share.

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How AI is Reshaping the Market

AI is transforming mortgage underwriting, fraud detection and customer engagement. Automated risk-scoring systems ingest credit history and banking data for real-time decisions. Lendi Group launched “Guardian,” an agentic AI companion that monitors rates and property values, aiming to become “AI-native” by June 2026. AI systems also detect forged documents and identity theft, reducing fraud losses.

Market Trends

Mortgage brokers accounted for 76.8% of new residential home loans in March 2025 quarter, a record, settling USD 99.37 billion. Refinancing applications rose 22% year-on-year in Q1 2025. First-home buyers were the most active buyer type in Q4 2025. APRA introduced a high debt-to-income lending limit (20% of new mortgages at DTI =6) from February 2026.

Market Summary

Market Valuation: USD 32,525.03 Million (2025) ? USD 47,081.16 Million (2034), CAGR 4.20%

Broker Share: 76.8% of new loans, USD 99.37 billion settled

Housing Outlook: KPMG forecasts national house prices +7.7% in 2026

Loan Types: Owner-occupier, investment, refinancing

Regions: New South Wales, Victoria, Queensland, Western Australia

Growth Drivers

Interest Rate Cuts: RBA’s easing cycle boosted borrowing demand. Macquarie Bank processed applications in as fast as 13 minutes and grew four times the major bank average.

Housing Supply Shortfall: KPMG cites “decades of structural shortfalls,” forecasting Perth (+12.8%), Brisbane (+10.9%) price gains in 2026.

Broker Channel Dominance: Brokers now originate over three-quarters of new loans, providing access to smaller lenders and driving competition.

Government Schemes: 5% deposit scheme pulls first-home buyers into the market; Gen Z home-buying intentions jumped five percentage points in 2025.

Competitive Landscape

Major banks (CBA, NAB, ANZ, Westpac) face rising competition from non-bank lenders and digital-only players. ING Australia reclaimed sixth-largest lender spot, with 95% of loans via brokers. Macquarie now represents nearly 7% of the market.

Recent Developments

September 2025: Lendi Group launched Guardian AI agent. December 2025: Broker market share hit 76.8% record. February 2026: APRA’s DTI limit came into effect. April 2026: KPMG forecast 7.7% house price rise in 2026.

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