Pepper Money is on a roll thanks to its rapidly growing prime mortgage business.
The non-bank lender revealed 2025 first half year results on Thursday, showing that total originations grew 38%, year-over-year, in the six months ending 30 June, to $4.5 billion.
Pepper CEO Mario Rehayem described the results as "very strong."
"We identified the opportunity, as market conditions improved, to accelerate our volume growth, which has seen us deliver originations growth in mortgages and asset finance," Rehayem said.
For the first half, new mortgages were up 53% to $2.8 billion. Growth was driven by residential and commercial prime loans, which surged 171% in the first quarter, from $700 million to $1.9 billion. That equals 70% of all new home loans. Roughly 97% of Pepper's loans came from the broker channel.
In addition, originations in asset finance were up 19% to $1.7 billion during the first half. This comprised $800 million in consumer assets, $500 million in novated leases and $400 million in commercial finance.
In terms of asset finance distribution, novated lease providers accounted for the largest share, contributing 49% of the volume. They were followed by commercial brokers at 17%, auto brokers at 13%, mortgage brokers at 11%, and dealers at 9%.
The firm's total assets under management also increased, up 4% during the six-month period, to $20.1 billion, the highest in Pepper's 25-year history.
The results were released following the Reserve Bank of Australia’s (RBA) latest interest rate cut. But some market players have noted that momentum has been building for some time, with competition in Australia’s housing market intensifying as far back as the February 2025 rate cut by the central bank. Meanwhile, prospective homeowners continue to grapple with rising living costs, a shortage of housing, and escalating property prices.
Pepper has responded by strengthening its team and broadening its product offering to stay ahead of the curve. Earlier this month, the non-bank added two senior-level hires to its Melbourne team in an effort to ramp up the commercial division. Pepper plans to mark its 25th anniversary with a celebration this spring.
Pepper's strong results point to a larger trend: Australia's growing non-bank sector, which are becoming increasingly relevant as traditional banks tighten lending requirements and competition heats up in the credit markets. An April 2025 report by the RBA found that non-banks now account for 10% to 16% of total lending, a share that's expected to keep rising. And as the non-bank market share grows – with more and more borrowers falling outside of traditional lending norms – so does the need for brokers to stay sharp, informed and ready to diversify the lending conversation.
For brokers, keeping up with the full range of lending options is essential as both market demand and competition rise. It also highlights the fact that more Australians are exploring alternatives to traditional banks in search of more adaptable financing solutions. With lenders such as Pepper becoming more in demand, brokers have a new chance to engage clients in discussions about non-bank lending.
