Australia’s median property price has now increased for seven consecutive months, after rising another 0.7% in August, according to Cotality. Three main factors have been driving this price growth, Cotality said:
- The three interest rate cuts in 2025 have increased buyers’ borrowing capacity
- Wages have been rising faster than inflation, further increasing borrowing capacity
- Demand has been exceeding supply – the number of homes being purchased is about 4% higher than the five-year average, but the number of homes being listed for sale is about 20% below the average for this time of year
Why get a pre-approval before you start your property search
- Show you’re serious – sellers and agents generally prefer dealing with buyers who already have their finance in place
- Know your limit – knowing how much you can borrow means you won’t waste time looking at homes you can’t afford
- Act fast – when you find your dream home, you can make a firm offer without waiting for the bank
Credit Card Use is Down – Which May Aid Property Buyers
Consumers are reducing their reliance on credit cards – the number of personal credit cards in circulation in July was 1.7% lower than the year before, while the amount of credit card debt attracting interest was 0.4% lower, according to the Reserve Bank of Australia. This reduction in credit card use is not only strengthening people’s finances, but also their home loan applications.
That’s because while it’s certainly possible to secure a home loan if you have a credit card, borrowing capacity may be significantly higher for borrowers who either have lower credit limits or no credit cards at all.
Why reduced credit card use can help your home loan application
- Higher borrowing power
- Less risk
- Greater spending control
If you’re thinking about applying for a home loan, contact us for guidance on credit cards vs borrowing capacity.
Borrowers Are Keeping On Top of Their Loans
Fewer Australians are falling behind on their mortgages. In fact, the share of home loans running 30-89 days late dropped from 0.66% in June 2024 to 0.55% in June 2025, according to APRA, the banking regulator.
Put simply, that means more than 99 out of 100 borrowers are up to date with their repayments – an extremely positive sign. Lower interest rates this year have helped ease pressure, and many households are managing their budgets better.
The data also shows borrowers are making different choices with their new loans:
- More people are putting down bigger deposits – 69.6% had a deposit of at least 20% in June 2025, up from 68.1% the year before
- Some are stretching their borrowing power – 5.5% of new loans had a debt-to-income ratio of six times or more, up from 5.0% in 2024
This mix shows that while most borrowers are in good shape, people approach home loans in different ways – some want the safety of extra equity, while others focus on buying power.
If you’d like to talk through your own loan strategy – whether it’s planning a new purchase or refinancing an existing loan – please get in touch
Rising Offset Savings Ease Mortgage Pain
Borrowers are depositing more money into offset accounts – and that’s cutting the interest they pay on their home loans.
On average, borrowers in the June quarter had $11,435 in offset for every $100,000 they owed on their home loan – up from $10,647 the year before, according to Australia’s banking regulator, APRA.
What’s an offset account?
It’s a savings account linked to your home loan, so whatever money you hold in this account it is offset against your loan balance, meaning you pay less interest. For example, if your home loan balance is $500k and your hold $20k in your offset account, you would pay interest on only $480,000 ($500k minus $20k). On a 30-year loan at 5.68%, that could mean saving over $100 per month.*
When offset is useful
- If you hold surplus savings or have regular cash flow in your account
- If you want the flexibility to access your money anytime, while still reducing interest
When it may not be worth it
- If your balance is usually low – the fee for an offset account might cost more than the interest you save
- If a basic home loan with little to no fees could leave you better off
* This example is for illustration only and does not take into account your personal circumstances. Savings will vary depending on your loan, interest rate, fees and charges. This information is general in nature and should not be taken as personal financial advice.
If you are buying, re-financing or have any questions, contact Sal Cinque on the below information.
TAG Finance and Loans
Sal Cinque | CEO
03 9886 0800 | loans@tagfinancial.com.au
Disclaimer: The information contained on this page is general in nature. Professional advice should be sought before acting on any aspect on this page. TAG Finance and Loans Pty Ltd ABN 25 609 906 863 Credit Representative Number 483873 National Mortgage Brokers Pty Ltd ABN 88 093 874 376 Australian Credit License 391209.