Mortgage Choice’s latest Home Loan Report reveals stark differences between generations when it comes to homeownership goals – and highlights the cost of going in unprepared.
The June quarter FY25 report combines national home loan submission data with survey responses from 1,000 consumers.
The report comes as markets are increasingly pricing in interest rate cuts from the Reserve Bank, with trimmed mean inflation easing to 2.7% and sitting comfortably within the RBA’s 2%-3% target range – a shift that could further influence buyer behaviour and loan demand.
CEO Anthony Waldron (pictured) said the data underscores the rise of strategic property buying among younger Australians.
“Our survey findings reveal the rise of ‘stepping stone buying’ or strategic property purchases, with a third of Gen Z buyers sharing they’re motivated to buy property as an investment,” Waldron said.
“And while 41% of Baby Boomers bought their first home with the intention of staying put for life, 54% of Millennial mortgage holders saw their first purchase a stepping stone to get onto the property ladder and make progress toward their ultimate goal.”
The report aligns with what mortgage brokers are seeing in the field – a widening spread in first-homebuyer ages. Some are entering the market in their early 20s after living at home and saving aggressively, while others are delayed until their mid-30s due to high property prices, student debt and deposit challenges.
While building long-term wealth remains the top reason for buying, fear of missing out is increasingly influencing purchase decisions, with 30% of buyers citing FOMO as a motivation.
The report shows that more than half of borrowers wish they had done more research before locking in their first loan.
“More than half of Australians wish they’d done more homework, and two-thirds (62%) of borrowers reported that they feel there might have been a better home loan option for them,” Waldron said.
Common mistakes included assuming all home loans are the same, focusing only on the interest rate, and not considering future needs.
“Homeowners who feel they chose the wrong property cited a lack of research, rushed decisions, and failure to plan for the future as the key reasons they felt regret,” Waldron said.
He noted that mortgage brokers can play a crucial role in helping buyers compare rates, features, and loan structures from a range of lenders.
Mortgage Choice data shows the average loan size climbed nearly 8% year-on-year to almost $640,000. WA recorded the largest growth, up nearly 13% to $569,405, while NSW/ACT remained highest at $728,592.
“To put the average loan size into perspective, a borrower aiming for a 20% deposit would need to have at least $160,000 saved to secure a property valued at $800,000,” Waldron said.
Waldron noted that the latest PropTrack Home Price Index showed that national home prices hit a record in July, up 4.9% year-on-year. He said continued price growth is pushing up loan sizes and extending the time it takes for buyers to save a home loan deposit.
“As loan sizes continue to climb, for most Australians, saving for a home loan deposit has become a marathon, not a sprint. Almost a third of respondents (31%) said it took five years or more to save their home loan deposit.
“With buyers spending years saving for a deposit, this provides a long runway to build knowledge and confidence. I’d recommend prospective buyers meet with a mortgage broker early on in their saving journey to help them understand their options and work towards their property goals.”
The value of loans for refinance rose 22.4% year-on-year, led by SA/NT at 28.6%.
“The Reserve Bank delivered its second cut to the cash rate this year over the June quarter. This has spurred borrowers to meet with their mortgage broker to review their home loans,” Waldron said.
With another rate cut expected in August, 72% of homeowners now review their home loan at least once a year, up from 59% a year earlier. Lowering the interest rate was the top reason for reviewing loans.
Investment is the clear leader for next property purchases, with 45% of homeowners selecting this option, up from 42% last quarter. Other reasons included buying a bigger place (22%) and seeking improved features and amenities (19%).
“Homeowners’ growing appetite for investment property is also reflected in our home loan submission data,” Waldron said.
“Investment properties, particularly in growth corridors and regional areas, can offer manageable entry points with the potential for rental income and capital gains. Our survey results suggest that Australians aren’t just buying homes for their lifestyle, they’re buying them for long-term financial gain.”
The value of investment loans was 26% higher year-on-year, with WA leading at 33.7%.
“Falling home loan interest rates and a tight rental market continue to drive demand for investment property, with Mortgage Choice data showing that demand for investment loans rose in every region over the June quarter,” Waldron said.
“The findings from our latest survey show that as Australians take a more considered approach to buying property, the case for expert guidance from mortgage brokers is critical to helping borrowers and buyers feel less overwhelmed by the decisions involved with buying property and choosing a home loan.”
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