Non-bank lenders are capturing a growing share of Australia's home loan market, with new analysis from Money.com.au showing the value of mortgages issued by non-ADI lenders jumped 65.2% over the past year.
The finding, drawn from the latest ABS Lending Indicators, points to borrowers increasingly looking past traditional banks as lending conditions tighten.
Non-bank lenders issued $10.49 billion in new home loans in the June 2026 quarter, up from $6.35 billion in the same quarter last year — a $4.14 billion increase.
Over the same period, lending across major banks and other ADIs, including smaller banks, credit unions and building societies, grew just 2.6%, from $85.41 billion to $87.61 billion.
Non-bank lenders now account for 10.7% of the value of new home lending, more than double the 4.8% share recorded in September 2019, with growth accelerating since mid-2023.
Nick Burgess (pictured), Money.com.au mortgage expert, said the shift partly reflects the regulatory gap between banks and non-banks.
"Non-bank lenders sit outside APRA's prudential rules, including the 3% serviceability buffer banks have to apply. Most still apply a buffer of their own, but it's often lower, which can mean more borrowing capacity than you'd get from a traditional bank," Burgess said.
He linked the trend to this year's tighter conditions more broadly.
"This matters more than ever as this year's rate rises, reduced borrowing power, and tighter lending conditions for investors following the federal budget have squeezed how much people can borrow. These factors are pushing more borrowers to look beyond traditional banks."
The growth is notable given the broader market moved in the opposite direction.
Non-ADI lending rose 3.2% quarter-on-quarter, from $10.16 billion to $10.49 billion, while total new housing lending fell 5.2% over the same period.
Burgess said that divergence undercuts the idea that non-banks are simply riding a rising market.
"If every type of lender was growing at roughly the same rate, you could put it down to an overall increase in the value of new home lending. That's not what we're seeing," he said.
Burgess also pointed to borrower fit as a factor beyond price, noting that non-banks can suit self-employed applicants or those with credit issues that don't sit neatly within mainstream bank policy, while some non-bank lenders remain competitive on rate for straightforward borrowers. He said the open question is whether the shift reflects a temporary response to current conditions or "the beginning of a more permanent shift in where Australians get their home loans."
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