Home loan complaints to the Australian Financial Complaints Authority (AFCA) rose 21% in 2025–26, as total complaints hit a record and financial difficulty disputes climbed amid cost-of-living pressure and higher interest rates.
AFCA received 119,949 complaints in the year to 30 June 2026, up 19%, according to its Annual Review 2025–26, published this month. Home loan complaints rose from 5,818 to 7,014, while financial difficulty complaints increased 17%.
“Nobody should be comfortable with complaint volumes at the levels we are now seeing,” said David Locke (pictured), AFCA’s chief executive officer and chief ombudsman.
Home loans were the product most often behind hardship disputes. They accounted for 1,676 of the 5,566 complaints from customers in financial difficulty, up from 1,541 a year earlier.
Across all hardship complaints, the most common issue was not a refused request but a financial firm failing to respond to one, raised in 3,076 complaints.
“The growth in financial difficulty and credit reporting complaints is particularly disappointing following a period of lower complaint volumes,” AFCA said.
Credit reporting, the other area AFCA singled out, is taking up a growing share of banking and finance complaints. Many involve consumers who say they did not consent to a credit enquiry or did not understand what would appear on their credit file.
AFCA ruled that a business loan arranged by a mortgage broker was covered by consumer credit law, because the broker knew the money would clear arrears on a client’s home loan.
The borrower, turned down by another lender, had been steered toward a six-month business loan from a related-party lender using her business number. When it expired, refinancing brought heavy fees and a requirement to set up a new company. AFCA also assessed the broker’s conduct against the relevant industry code.
“The true purpose of a loan, rather than simply how it is documented, determines whether consumer credit protections apply,” the review said.
AFCA closed 117,150 complaints, up 16%, and cut its average time to close a complaint from 79 to 69 days. Consumers were awarded more than $834 million in compensation. Of that, $465 million related to cases eligible for the Compensation Scheme of Last Resort, where awards are capped at $150,000.
More than half of all complaints closed at the Referral stage, when the financial firm is first notified. AFCA said this suggests more disputes could be resolved earlier through firms’ own internal dispute resolution.
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