New survey points to resilient demand and larger loan sizes going into 2026
Australian homebuyers are continuing with purchase plans despite higher interest rates and record house prices, according to new data from Mortgage Choice’s Home Loan Report.
Of the 1,000 consumers surveyed, 42% indicated they intend to proceed with a property purchase in 2026.
Many, however, reported that stronger income and more stable market conditions would lift their confidence. Forty-three percent said a pay rise would make them more comfortable buying, 39% pointed to steadier prices, and 35% nominated greater stock in their preferred area or price range as a key factor.
“It’s understandable that Australians would be looking to their pay checks and property prices and availability to feel more confident about their purchase plans,” said Anthony Waldron (pictured right), chief executive of Mortgage Choice.
“In 2025 we saw the cash rate reduce three times before the Reserve Bank hit the brakes and held the rate steady at 3.60%,” said Anthony Waldron, chief executive at Mortgage Choice. “We’ve also seen wage growth slow, and home prices reach new record highs, with national home prices rising nearly 9% over the year.”
Latest figures from the PropTrack Home Price Index show the national median property value reached $883,000 in January, the 13th consecutive month of growth. While Mortgage Choice expects price growth to moderate this year, serviceability pressures are set to intensify following the first cash rate increase in more than two years, which will push up repayments for most borrowers.
The report also suggests that many customers have taken advantage of previous rate cuts to build in a repayment buffer. Among respondents with a home loan, 60% continued to pay at a higher level even after three reductions in the cash rate in 2025, rather than lowering repayments. Just over a quarter, 26%, chose to reduce repayments to release cash flow, while 10% did not realise they could change what they paid.
“Pleasingly, our survey reveals that most borrowers are proactively managing their home loan,” Waldron said. “We asked respondents with a mortgage how they would manage if their variable rate increased by 25 basis points and 35% said they could handle it easily without changing their spending, while 43% say they could manage but would need to cut back on their discretionary spending.”
From a credit assessment perspective, Kelly Carter (pictured right), mortgage broker at Mortgage Choice in New South Wales, pointed to existing serviceability buffers as an important safeguard. Most lenders apply a rate at least three percentage points above the product rate when testing a new application. This buffer is now proving useful as interest costs rise.
“I think not just paying the minimum repayment is really important – assume that the interest rate is going to be 7% or 8% and just pay extra,” Carter said. “So if a rate rise comes, then it's not damaging. You've already got the money there, you're reducing the interest that you're paying on your home loan.”
Despite affordability challenges, borrowers are taking on larger debts to secure properties. Mortgage Choice reported that average loan sizes rose 11% over the year, led by borrowers in South Australia, the Northern Territory and Queensland, which were among the strongest markets for price growth in 2025.
The total value of loans for property purchases also increased by close to 30% year-on-year, with the most active buyer segments in New South Wales, Queensland and the Australian Capital Territory.
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