Non-Bank Lenders Surge: What Borrowers Need to Know

Non-bank lenders grew home loans by 65 per cent last financial year as major banks stalled — and that shift is creating real choices for borrowers.

Non-bank lenders are quietly rewriting the Australian mortgage market, and if you haven't considered them when looking for a home loan, now is the time to look more carefully.

According to figures from the ABS Lending Indicators, the value of new home loans written by non-bank lenders rose 65.2 per cent year on year to $10.49 billion in the June 2026 quarter. Over the same period, lending by the major banks and other authorised deposit-taking institutions climbed just 2.6 per cent to $87.61 billion. That gap is stark. And it's widening against a backdrop where overall mortgage demand fell 16.4 per cent year on year in July.

To put the longer arc in perspective: non-banks accounted for 10.7 per cent of new home lending by value in the June quarter, up from just 4.8 per cent when the ABS started tracking this data in 2019. That's more than a doubling of market share in seven years.

Three of Australia's largest non-bank lenders — Pepper Money, Resimac, and Liberty Financial — have just released results that make the shift even more concrete.

The Numbers Behind the Surge

Pepper Money posted record total originations of $6.3 billion for the six months to 30 June 2026, up 40 per cent year on year. Mortgage originations alone climbed 63 per cent to $4.5 billion, while applications surged 35 per cent to $9.9 billion. The lender's total assets under management grew 20 per cent to $24 billion. Within the mortgage book, prime lending dominated, with prime mortgage originations jumping 83 per cent to $3.6 billion and now accounting for 79 per cent of mortgage flow — up from 70 per cent the prior year.

Pepper CEO Mario Rehayem explained the shift as a deliberate calibration rather than a pivot. "With Pepper, we're never weathered to one product, nor are we ever weathered to just one customer persona or cohort," he told The Adviser. "For us, we try to best position where the market is going. If we feel that the market is a little bit hot and there is a bit of risk out there, then we would tend to take some risk out of the book by focusing more on prime."

Resimac reported financial year 2026 group originations of $6.7 billion, up 16 per cent, with total applications rising 17 per cent to $10.5 billion. Home loan settlements increased 20 per cent to $5.9 billion, and mortgage applications grew 24 per cent to $9.4 billion. The lender's home loan assets under management reached $14.7 billion.

Resimac CEO Pete Lirantzis pointed to the broker channel as central to the result. "More brokers chose to use us more often, reflecting the strength of our proposition and the confidence they have in our ability to support a broader range of customers," he said. "Their support has been a key driver of our growth, and we remain focused on making it easier for brokers to place more customers with Resimac."

Liberty Financial originated a record $6.11 billion across the group in FY26, including $3.53 billion in residential lending — the second-highest residential result the lender has ever recorded. Liberty CEO James Boyle noted that while traditional lenders had reported significant declines in home loan demand, Liberty had continued lending at a comparable rate. "We're not a deposit taker, and we get to set our own risk appetite, which means we're able to help customers outside the parameters that APRA set," he said. "I think the addressable market for non-banks is improving in the current environment, and that's why we've maintained our momentum, rather than having slowed."

What This Means if You're Shopping for a Home Loan

The surge in non-bank lending isn't just an industry statistic — it has direct implications for borrowers.

For years, many borrowers defaulted to the big four banks simply because they were familiar. But non-banks have steadily built out their product ranges, improved their turnaround times, and invested heavily in broker-facing technology. Pepper is expanding credit policy and security-property settings while automating application, approval, and servicing processes. Resimac is deploying artificial intelligence and automation to lift service levels. Liberty is leveraging its ability to set its own risk appetite independently of APRA's deposit-taking institution rules.

The practical result: non-banks can often approve borrowers — including those with complex income structures, self-employed situations, or non-standard property types — faster and with greater flexibility than traditional lenders.

If you're looking to refinance your home loan, a non-bank lender comparison is worth including in your shortlist. Non-banks set their own credit appetites independently of APRA's ADI rules, which can mean meaningfully different assessment criteria and sometimes more competitive pricing on certain loan structures. You can estimate your potential repayment savings using our refinance savings calculator.

For first home buyers, the non-bank surge is also relevant. With overall mortgage demand down 16.4 per cent year on year according to ABS Lending Indicators data, lenders are competing harder for every application. That competitive pressure benefits borrowers in the form of keener pricing, faster approvals, and more flexible product terms — particularly from non-banks who are growing aggressively while the major banks barely move.

The broker channel remains the primary distribution path for most non-bank lenders, which means working with an experienced broker gives you access to the full market — not just the names on a bank's shopfront. Ask your broker to include at least one non-bank lender in any comparison they run. You can also compare the cheapest home loans to see how lenders stack up on rate and features.

As The Adviser reported, Pepper Money, Resimac, and Liberty all credited broker relationships, flexible credit settings, and differentiated propositions as the key drivers of their growth in a slowing market. For borrowers, that's a useful signal: lenders who depend on the broker channel have strong incentives to keep their products, pricing, and service sharp.