Mortgage Delinquencies Hold Near 0.67% as Demand Falls

New home loan demand has dropped sharply in 2026 even as mortgage arrears remain low across Australia.

Updated on Nov. 2, 2026 in Residential

Gouache-painted editorial illustration of a house-shaped keyhole above a ledge of stacked coins on a warm ochre field, with generous cream negative space. — Australian mortgage delinquencies held near 0.67% in July even as new home-loan demand fell 13% that month and 11.2% in August, according to Experian. AI Illustration. Upload story photo >

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Mortgage delinquencies of 30 days or more stood at 0.67% in July 2026, three basis points lower than a year earlier. Meanwhile, new home loan demand fell 13% in July and 11.2% in August 2026, according to Experian's bureau data.

Why it matters

The fall in new lending comes as the Reserve Bank of Australia lifted the cash rate to 4.6%, its fourth increase this year. With unemployment rising to 4.7% in September, borrowers face mounting pressure on household budgets.

New mortgage funding reached $199.8 billion in the June quarter, 24% more than a year earlier, while the average owner-occupier loan stands at $731,000, 7.8% higher than a year ago. Whether lending momentum holds beyond the June quarter is not yet clear.

The players

Reserve Bank of Australia

Australia's central bank, which sets the cash rate and has lifted it to 4.6% this year in its fourth increase of 2026.

Experian

A credit reporting agency whose bureau data tracks new home loan demand and mortgage delinquency rates across Australia.

CommBank

The Commonwealth Bank of Australia, whose economists have forecast a further cash rate rise to 4.85% on 3 November.

The details

Loans at six times the borrower's income or more made up 5% of new funding in the June quarter, while loans with a loan-to-value ratio between 80% and 90% made up 22% of new lending. The value of mortgages held by authorised deposit-taking institutions grew 0.3% in September, half the pace of a year earlier.

June quarter 2026: new mortgage funding reached $199.8 billion.
July 2026: mortgage delinquencies stood at 0.67% and new home loan demand fell 13%.
August 2026: new home loan demand fell 11.2%.
September 2026: unemployment rose to 4.7% and mortgage demand fell 19.2% year on year.
3 November 2026: CommBank economists forecast a cash rate rise to 4.85%.

Market Landscape

APRA's monthly banking statistics show mortgage balances at authorised deposit-taking institutions grew 0.3% in September, half the pace of a year earlier. The slowdown tracks the Reserve Bank's successive rate rises through 2026.

Higher cash rates raise monthly repayments on variable-rate home loans, and average owner-occupier borrowers now carry about $731,000 in debt. Households with high debt-to-income ratios face the greatest pressure as rates climb.

The takeaway

Borrowers with variable-rate loans should review their budgets ahead of any further cash rate increase. Lower delinquency rates today do not guarantee stability if unemployment keeps rising.

What happens next

CommBank economists forecast a cash rate rise to 4.85% on 3 November 2026, a decision that will directly affect repayments on variable-rate mortgages.