Investor home-loan applications are down 45% since the end of January, and refinancing just made up a record 57% of Loan Market Group's lodgements. That is the spring mix. Total applications bounced off the July low, but once refinancing is stripped out, new lending is still falling. The group's October 2026 Market Report covers weekly broker lodgements through to the end of September. Here is what that means if you are buying, investing or thinking of switching.
The short version
- Including refinancing, total Loan Market Group (LMG) applications bounced 10% in September from the July lows.
- Refinancing hit a record 57% of lodgements in the last two weeks of September (not seasonally adjusted). Ex-refi, seasonally adjusted new lending fell a further 6% in that fortnight, and is 24% below end-January by value.
- Since end-January, by value: investors −45% (existing properties −56%, new homes −10%), first-home buyers −13%, owner-occupier upgraders −16%.
- Queensland's separate −56% is investor applications in that state by count, not the national existing-property figure.
- Cash rate 4.60%, effective 30 September. Next Reserve Bank decision: Tuesday 3 November, 2:00pm Adelaide time.
The spring bounce is mostly churn
Count every application, including refinances, and September looks like a bounce. Loan Market Group says total mortgage applications rose 10% during September from the July lows — the usual spring pick-up, plus more refinancing.
In the last two weeks of September, refinancing reached a record 57% of all LMG lodgements. That share is not seasonally adjusted. LMG called it an "increase in mortgage churn": brokers shopping for better deals, and banks discounting more in recent months. More than half the files in that fortnight were refinances rather than new lending.
Strip refinancing out and seasonally adjust, and the bounce goes. New lodgements fell a further 6% in those two weeks. LMG's line was that there was "no recovery in underlying mortgage activity." Against the end of January 2026 — just before this year's rate rises and the May Budget tax changes — the value of that new lending was down 24%. Spring has added refinance files. It has not put new lending back where the year started.
The investor split: existing homes fell much further than new ones
Investors account for most of that fall. On the same comparison — value, seasonally adjusted, excluding refinancing, end of January to the last two weeks of September — investor lodgements are down 45%, and down a further 23% by value since the end of June. By number of applications, investors are down 44% nationally. Fewer investor loans, not just smaller ones.
The May 2026 Budget changed negative gearing and capital gains tax settings for property investors. On LMG's figures, existing investment properties — no longer eligible for negative gearing — are down 56% by value. New homes, which still keep that tax treatment, are down 10%. The paragraphs below describe that split. They are not a view on the policy, and they are not tax advice.
| Investor lodgements since end-January | Change |
|---|---|
| All investors, by value | −45% |
| Existing properties, by value (no longer eligible for negative gearing) | −56% |
| New homes, by value (still eligible for negative gearing) | −10% |
| All investors, by number of lodgements | −44% |
| Queensland investors, by number of lodgements | −56% |
Loan Market Group, October 2026 Market Report. Value rows are seasonally adjusted, excluding refinancing, end of January to the last two weeks of September. The Queensland row is investor count in that state, not the national existing-property figure.
If you are weighing a purchase, how the May changes apply to you — including capital gains tax — is a question for your accountant. We don't give tax advice, and the table is not a recommendation to buy new, buy established, or stay out. Nationally, investor lodgements are down 44% by number, not 56%.
Who else slowed, and which states
First-home buyers are down 13% and owner-occupier upgraders are down 16% on that same value comparison. Loan Market Group says both have since stabilised, and both are still below the end of January. Stabilised means the slide has levelled off on LMG's read. It does not mean volumes are back to January.
Hold that 13% apart from other first-home-buyer series. It is LMG broker lodgements since the end of January. On 13 October we covered Equifax applications, down 22.1% year on year in September. Different source, different window — don't add them together. State totals below are the same end-of-January window, by value, excluding refinancing. South Australia, Western Australia and the rest of Australia are not seasonally adjusted, because the samples are smaller.
| State or group | Change in value | Seasonally adjusted? |
|---|---|---|
| New South Wales | −29% | Yes |
| Queensland | −30% | Yes |
| Victoria | −20% | Yes |
| South Australia | −26% | No |
| Western Australia | −11% | No |
| Rest of Australia (Tasmania, ACT, Northern Territory) | −11% | No |
Value of new lodgements excluding refinancing, end of January to the last two weeks of September. Queensland's −30% is the state total, not the −56% Queensland investor count.
South Australia's own split, from LMG's state chart (value, not seasonally adjusted): first-home buyers −10%, upgraders −23%, investors −42%, total −26%. That is a state figure, not a suburb result. Because SA, Western Australia and the rest-of-Australia group are not seasonally adjusted, read them as the raw value change LMG published.
Wanting to refinance is not the same as being able to
A record share of broker lodgements is refinance. That is not the same as everyone who wants a lower rate being able to move.
Equifax, cited by Australian Broker on 21 October, says demand to refinance with a new lender fell 8.8% year on year in September 2026. Serviceability is keeping many people with their current lender. The Mortgage & Finance Association of Australia's August 2026 sentiment survey found 49.2% of brokers had more clients unable to refinance because of serviceability — more than double the share six months earlier.
Refinance can be a record share of broker files while fewer people than a year ago get as far as a new lender. Lenders still assess most applications at the loan rate plus a 3% APRA buffer. After four rises of 0.25 percentage points this year, that test is harder than in January. Like-for-like refinance exemptions exist in some cases. They are not automatic.
The cash rate is 4.60%, effective 30 September, following the 29 September decision. The next decision is Tuesday 3 November at 2:00pm Adelaide time (2:30pm AEDT). Whether a switch is worth it on the rate and the fees is covered in Tuesday 20 October's piece. This article does not reuse that piece's survey. The check here is your current rate against your lender's new-customer rate, then a comparison across lenders — and only if the loan clears serviceability.
Affordability, as context only
PRD Real Estate's Australian Economic and Property Report, via realestate.com.au on 22 October, says mortgage repayments now take a record 50.9% of family income, 3.3 percentage points worse over the year. That is PRD's measure, not a Reserve Bank series, and it should not be quoted as one. The same report puts fewer than 1.5% of housing loans in arrears and less than 0.5% of outstanding balances in negative equity, which lines up in direction with the Bank's early-October message that most existing borrowers are still coping. Qualifying for a new loan, or for a refinance, is a separate test.
What it means if you're investing, buying or switching
Investors. Existing-property lodgements are down 56% by value since the end of January; new-home investor lodgements are down 10%. The tax treatment of new versus established now matters alongside the rate. Get advice before you assume last year's structure still works — your accountant for the tax, a broker for whether the loan still services. The table describes who applied. It does not say what you should buy.
Owner-occupiers and first-home buyers. LMG says these lodgements have stabilised, and they are still below January, with borrowing capacity tighter after four rises of 0.25 percentage points this year. Softer prices can help a deposit: Domain's September quarter showed house prices down in all eight capitals (22 October). Recheck capacity on today's rates. Keep LMG's 13% and the Equifax 22.1% as separate series.
Refinancers. A record share of broker work is a switch, and Equifax's 8.8% plus the MFAA's 49.2% say many people who want to move cannot clear serviceability. Compare your rate with your lender's new-customer rate, then look across lenders, including the comparison rate and fees. Saturday's piece is the backdrop to 3 November. Nothing here promises an approval or a rate.
South Australia. New lodgements are down 26% by value since the end of January (not seasonally adjusted): investors −42%, upgraders −23%, first-home buyers −10%. Useful if you are buying or investing in SA. It is not a suburb figure, and the smaller sample moves around more than New South Wales or Victoria.
Related reading
- Nearly half a million borrowers plan to refinance, and cashbacks are back (Tuesday 20 October)
- First home buyers are stepping back (Tuesday 13 October — Equifax, not the LMG −13%)
- Every capital city's house prices fell in the September quarter (22 October)
- The RBA just said inflation looks "materially worse" (Saturday 24 October)
Buying, investing or thinking of switching while rates are high?
Get your options checked against today's serviceability rules. Book a no-obligation chat — we'll start with general information, and if you want personal recommendations we'll do a proper fact-find first. There's no cost and no pressure.
Sources: 1. Loan Market Group, Market Report October 2026 (PDF), lodgements to end-September 2026 — totals, refinance share, investor split, state figures (https://www.loanmarket.com.au/wp-content/uploads/2026/10/Loan-Market-Market-Report-October-2026.pdf). 2. Australian Broker, "Refinancing hits record 57% as investor lodgements slump", 21 October 2026 (https://www.brokernews.com.au/news/breaking-news/refinancing-hits-record-57-as-investor-lodgements-slump-290189.aspx). 3. LMG summary, "Mortgage lodgements slow further, led by investors" (https://lmg.broker/lmg-data-mortgage-lodgements-slow-further-led-by-investors). 4. Mortgage Professional Australia, "Refinancing hits record high at LMG", 21 October 2026 (https://www.mpamag.com/au/news/general/refinancing-hits-record-high-at-lmg/594318). 5. Equifax: demand to refinance with a new lender −8.8% year on year in September 2026, as cited in Australian Broker, 21 October 2026. 6. MFAA August 2026 market sentiment survey: 49.2% of brokers had more clients unable to refinance because of serviceability, more than double six months earlier, as cited in Australian Broker, 21 October 2026. 7. PRD Real Estate, Australian Economic and Property Report, via realestate.com.au, 22 October 2026 — repayments 50.9% of family income; affordability 3.3 percentage points worse over the year; arrears under 1.5% of housing loans; negative equity under 0.5% of outstanding balances (https://www.realestate.com.au/news/mortgage-nightmare-aussies-spending-half-their-income-on-home-loans-as-investors-flee/). 8. Reserve Bank of Australia, Media Release 2026-27, cash rate 4.60% (https://www.rba.gov.au/media-releases/2026/mr-26-27.html). Next Monetary Policy Decision: Tuesday 3 November 2026, 2:30pm AEDT (2:00pm Adelaide time).
General information only, not credit advice. It doesn't take your objectives, financial situation or needs into account.
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