With the Reserve Bank’s next rate decision looming, Equifax has reported a notable rise in mortgage and refinancing enquiries, highlighting growing consumer optimism and proactive credit behaviour.
But despite improving sentiment, the data firm warns that many borrowers still face sustained mortgage stress.
Equifax executive general manager Moses Samaha (pictured) said Australians are increasingly confident in the housing market outlook, with total mortgage demand up 3.8% year-on-year in April.
“There’s greater clarity now,” Samaha said. “The US elections are over, and the Australian election has likely contributed to a renewed sense of confidence among Australian consumers. This is being reflected in the credit market with mortgage enquiries up 6.6% YoY and overall credit demand climbing.”
Refinancing activity has seen particularly strong growth.
“So far this year we have seen a significant rise in refinancing activity (36.7% YoY in April alone), particularly among investors, which suggests borrowers are proactively looking for better deals in anticipation of further interest rate relief,” Samaha said.
Samaha said that another potential rate cut in May could further fuel mortgage demand, with owner-occupiers and investors both positioning to capitalise.
“Overall mortgage demand increased 3.8% YoY in April and with another potential rate cut in May, we can expect to see more new mortgage applications and more owner-occupiers refinancing even if their banks pass on the full rate cut to find a better deal,” the Equifax leader said.
This trend reflects broader market optimism, as recent reports showed that the February RBA rate cut contributed to a lift in mortgage activity and eased stress for some households.
Westpac and CBA figures also showed signs of easing mortgage pressure, with markets now pricing in up to four RBA rate cuts by year-end—potentially reducing mortgage rates by 1% and offering borrowers some long-awaited relief.
It also follows NAB’s latest research showing housing sentiment surged in Q1 2025 as buyers responded positively to falling interest rates and rising property values.
Despite the upswing in credit demand, Equifax warned that many households are still grappling with debt pressures. Mortgage arrears rose 9.2% in the March quarter, and personal loan and credit card arrears also increased by 18.7% and 19.3% respectively.
“Despite an increase in credit activity, arrears continue to rise. The total dollar amount owed on 90+ day mortgage arrears rose by 9.2% in Q1, suggesting that borrowers with larger debts are still falling behind,” Samaha said.
He also cautioned against relying solely on monetary policy for financial relief.
“While a rate cut would be welcomed by many, particularly those under financial strain, it’s not a silver bullet,” Samaha said. “Consumers hoping for immediate relief may not feel the impact in their household budgets straight away.”
Drawing on recent experience across the Tasman, Samaha pointed to New Zealand as a cautionary example. Since August, the country has implemented five cash rate reductions, bringing the rate to 3.5%. Despite this, arrears have continued to rise.
“It’s a reminder for Australians to exercise caution and consider a broader range of financial strategies and economic levers to help manage financial stress – rather than relying solely on rate relief,” Samaha said.
