Lenders Cut Rates as Home Loan Activity Slows in June

Mortgage volumes fell in June, but 18 banks have cut variable rates to compete for business — and borrowers who ask are getting real discounts.

The June quarter home loan data is in, and the headline is this: overall activity has pulled back, but for borrowers who are paying attention, the conditions right now are as good as they have been in two years for securing a better deal.

Lending Volumes: What the Quarter's Data Shows

Australian Broker reports that home loan lodgements at one of Australia's largest mortgage aggregators fell in the June quarter, against a backdrop of three consecutive interest rate rises, regulatory changes from the federal budget, and continued global uncertainty. The quarter saw 38,583 home loans worth $28.1 billion lodged, down from $29.5 billion across 40,784 loans in the prior quarter.

The average loan size edged higher, rising to $727,000 from $724,000 the previous quarter.

Breaking down who is borrowing tells an interesting story:

- **First-home buyers** held steady at 12% of total lodgements, unchanged from the prior quarter - **Refinancers** ticked up slightly to 16% from 15% - **Upgraders** increased to 44% from 43% - **Investors** fell to 34% from 35%, with June alone seeing investor share drop to just 32%

The group's chief executive described the results as positive overall, noting that the easing in June was expected given the federal budget and the rate environment. "We believe the fiscal policy changes announced during the quarter will represent a period of readjustment rather than a structural shift in underlying demand," the CEO said.

Brokers are already seeing conditions improve. Luke Ashby, a finance and mortgage broker at Brisbane-based Emerge Finance, told Australian Broker that inquiries at his firm were down around 40% in May year on year, but had started trending back up by the end of June and into early July. Perth-based broker Claire Viskovich from Beez Neez Finance was similarly upbeat: "Now that the federal budget has passed, we know what's happening, we know what's going to happen in the next year. The momentum will definitely continue."

Banks Are Competing Hard — and Borrowers Are Winning

Here is the most actionable insight from the current environment: 18 banks have cut their variable interest rates over the past month. That is not a coincidence. It reflects banks responding to slower borrower activity by sharpening their pricing to attract business.

The shift is also visible in lender market share data. Major banks fell to 58% of lodgements in the June quarter, down from 60%, while non-major lenders grew their share to 42% from 40%. Within the major banks, Westpac brands captured 18% of lodgements for the quarter, with Commonwealth Bank and ANZ at 16% each, Macquarie at 14%, and NAB at 8%.

Non-majors gaining share means the competitive landscape is broader than it appears on the surface. If you have been with the same lender for more than a year and have not asked for a rate review, there is a real probability you are paying more than you need to.

The practical tip here: even a reduction of 0.15% to 0.25% can save thousands of dollars over the life of a loan. Asking for a 0.5% reduction is not unreasonable right now. Before making that call, use our refinance savings calculator so you know exactly what you are negotiating toward and what switching would be worth.

Where the Market Is Still Moving

Not all regions are seeing the same slowdown. Western Australia stands out nationally, with lodgements up 14.6% year on year, supported by a resource-sector economy and a supply-constrained housing market. South Australia has also outperformed, posting 7.9% lodgement growth over the year.

Quarterly lodgements fell across New South Wales, Queensland, South Australia and Victoria, but the Northern Territory and Western Australia both saw higher volumes over the quarter, bucking the national trend.

What to Do Before the Window Closes

If you are an existing borrower who has not reviewed your rate in the past 12 months, now is the right time. Banks are competing for customers in a way they were not 18 months ago, and that competition creates genuine leverage for borrowers who are willing to ask.

Compare the cheapest home loans currently available to see what the market is offering and where your rate sits relative to the best available. If a switch makes sense, our refinance comparison can help you see the full picture.

If you are a buyer who held back during the uncertainty of May and early June, brokers on the ground are reporting that inquiries are picking up again. Confidence is returning. Understanding your borrowing capacity now puts you ahead of others who are still waiting.

And for first-home buyers, the combination of softer investor demand and banks competing for new business is creating a real opportunity. Loan-to-value ratios and approval conditions have not tightened — and in some cases, the terms available from non-major lenders are better than they have been in years.

Source: Australian Broker