Australia’s property investors are driving a surge in borrowing, with investment loans and average loan sizes at record highs, according to the Mortgage Choice Home Loan Report for the September 2025 quarter.
The quarterly report, based on 1,000 consumer survey responses and Mortgage Choice’s loan submission data, found investor momentum rising alongside growing reliance on brokers and continued price gains despite cost pressures.
“This has been a record-breaking quarter for the Mortgage Choice network," Mortgage Choice CEO Anthony Waldron (pictured) said. "Our home loan submission data over the September quarter reveals that the value of loans is up in every region. And the results from our latest consumer survey point to this strong activity continuing into summer.”
Investment loan values jumped 34% year-on-year, led by Western Australia (52.1%) and Queensland (39.3%). Mortgage Choice data shows investor lending has risen for six straight quarters, outpacing owner-occupier growth.
“Our latest consumer survey shows that current market conditions are encouraging a new generation of investors to enter the market, suggesting the demand for investment properties is likely to remain strong," Waldron said.
“Our survey reveals that investors are the most confident buyers right now... optimism among prospective investors is 12 percentage points higher than those looking to buy a home.”
Waldron added: “Market conditions are driving a shift in investor behaviour, with our research showing a growing number of investors are planning to hold onto their investment property over the next 12 months.
"Investors are benefitting from lower mortgage rates, which make it more affordable to service investment loans. At the same time, a limited supply of rental property is driving demand from tenants and pushing up the price of rents.”
The report found 24% of first-time buyers would consider an investment property as their first purchase — with interest strongest in Victoria (40%) and New South Wales (27%).
“Many first-time buyers are turning to investment properties as their way to get their foot on the property ladder... buying a home is out of reach for many, but buying an investment property gives them more options to take that first step into the property market,” Waldron said.
Among those considering investing first, the top motivations were building equity (27%), generating income (22%), and buying in more affordable areas (17%). However, preparation remains low, with only 31% knowing their borrowing power and 32% setting a budget.
“In a competitive market, a lack of preparation can easily cost you the property you want,” Waldron said.
While 57% of Australians use AI for daily tasks, only 27% use it for property or loan decisions. The report found 88%rated having a human mortgage broker as important to the process.
“A home loan is the biggest financial commitment most people make in their lifetime, so it’s completely understandable that borrowers want the support of a mortgage broker during the process,” Waldron said.
He added: “Although Australians are more comfortable using AI for early-stage tasks like comparing products (36%) and estimating borrowing capacity (32%), AI cannot replace the value and expertise of a broker. Consumers want a broker’s support throughout the home buying journey – particularly for the parts of the process that require nuance and trust.”
The top broker-supported activities were negotiating with lenders (52%), explaining the process (48%), and providing personalised advice (41%).
The average loan size climbed to a record $660,000, up 8.4% year-on-year, with Western Australia leading the growth at 12% ($588,010).
“The September quarter was the first time the average loan size in the SA/NT region exceeded $600,000,” Waldron said. “In South Australia, there is a lack of supply of properties in the $600,000 to $800,000 price range… In the Northern Territory, most of the demand is being driven by investors who are being lured by the lowest median home prices in the country.”
Purchase loans rose 23.8% year-on-year, led by NSW/ACT (up 32%), while refinancing increased 18.5%, driven by Queensland borrowers (+26%) seeking better rates.
Mortgage Choice data shows demand for fixed-rate loans fell 35.3% year-on-year, with only 2% of submissions including a fixed component.
“Our quarterly submission data shows that borrowers are overwhelmingly opting for variable-rate loan products," Waldron said. "Even though we’re seeing some lenders offering fixed-rates starting with a 4, most borrowers are sticking with variable-rate products as they wait for the anticipated future cash rate cuts.”
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
