Personal loans are picking up in Australia at the same time mortgage account growth is easing. That divergence shows up clearly when you compare official lending flows with credit bureau signals.
The ABS reported the value of new personal fixed term loan commitments at $9.3b in the September quarter 2025, up 12.7% from a year earlier. Equifax reported personal loan applications up 11.6% year on year in Q3 2025, while total active mortgage accounts fell 0.8% year on year.
This is not a story about a housing market switch off. It is a story about affordability thresholds, refinancing churn, and households using unsecured credit differently in a higher cost environment.
What The Latest Data Actually Says
Start with the housing flow data. In the September quarter 2025, the ABS reported the number of new loan commitments for dwellings up 6.4% and the value up 9.6%. That is a strong quarter, particularly for investor activity.
Now compare that to the “stock” signal. Equifax’s quarterly insights show mortgage applications up 10.3% year on year, but total active mortgage accounts down 0.8% year on year.
“Total active mortgage accounts (-0.8% vs Q3 2024).”
These are not contradictory. They are measuring different parts of the system.
How Mortgage Applications Can Rise While Active Mortgage Accounts Fall
Refinancing can reduce account counts
The Reserve Bank noted “strengthening competition in the mortgage market” and “continued growth in refinancing activity” in its November 2025 Statement on Monetary Policy.
When households refinance and consolidate, multiple facilities can become 1, and accounts can close even while new approvals remain active.
Bigger average loan sizes can shift the mix
A market can see fewer new accounts if entry level borrowers drop out, while higher income borrowers keep borrowing larger amounts. That creates a situation where credit and commitments can look resilient, but account growth softens.
Flow versus stock matters
ABS lending indicators report borrower accepted commitments, which are firm offers accepted by borrowers within the period.
Equifax “active mortgage accounts” is a snapshot of what remains open and active.
When churn is high, these measures can move in opposite directions.
Why Personal Loans Are Rising Now
The personal loans uplift is visible in both the ABS commitment value and Equifax application growth. The drivers are not purely “more spending”. They are usually a mix of budgeting, substitution, and risk management.
Households are looking for predictable repayments
In a tighter monthly budget, fixed repayment structures can feel easier to plan around than revolving products. That does not make them cheaper by default, but it can make cash flow more predictable.
Consolidation behaviour is common in higher rate periods
When people carry multiple liabilities, they often look for a single repayment and a clearer end date. That can push some demand toward unsecured instalment credit even while mortgage decisions become more conservative.
Visibility and policy changes affect borrower choices
Equifax flagged significant growth in BNPL applications and tied this to the sector’s changing environment, which can influence how consumers and lenders view short term credit usage.
When more activity becomes visible, some borrowers shift toward products with clearer structures and disclosures.
Why Mortgage Growth Is Not “Soft” In Every Direction
It is also important not to overstate the mortgage cooling signal. The ABS reported strong quarter on quarter growth in new dwelling loan commitments in September quarter 2025, particularly on the investor side.
At the same time, macroprudential policy is moving toward limiting the riskiest leverage.
APRA is activating a debt to income limit effective from February 2026, allowing up to 20% of new mortgage lending at a debt to income ratio greater than or equal to 6x, applied separately to owner occupier and investor portfolios.
APRA also described the limit as a “guardrail” that is not currently binding at an aggregate level, meaning it is designed as a preventative measure rather than an immediate credit squeeze. APRA’s DTI limit starts in February 2026 and caps high DTI lending at 20%.
This backdrop helps explain the divergence: mortgages remain active, but policy and affordability dynamics are pushing lenders to stay disciplined on leverage.
What It Means For Borrowers Comparing Personal Loans And Mortgages
This is general information, not financial advice. The practical implications are still clear.
1. Expect more verification, not less
If demand rises, lenders usually respond with stronger controls. Income and expense verification, identity checks, and consistency checks are now baseline.
2. Focus on affordability, not approval speed
A personal loan is only useful if repayments fit without creating a second crisis. Build a simple buffer test before you apply: rent or mortgage, utilities, groceries, transport, and 1 unexpected cost each month.
3. Avoid “stacking” applications
Multiple credit enquiries in a short period can affect your profile. If you are also planning a home loan application, keep personal credit activity clean and deliberate.
4. Use personal loans with a defined purpose and end point
A clear use case and a clear repayment plan reduce the risk of repeat borrowing. If you cannot describe the exit plan in 2 sentences, pause.
MeLoan’s stance in this market is straightforward: speed is less important than clarity on total cost, predictable repayments, and early hardship pathways.
What To Watch Next
If you are tracking this story for content updates, 3 indicators will signal whether the divergence continues:
- ABS Lending Indicators releases for sustained year on year growth in personal fixed term commitments.
- Equifax consumer credit insights for ongoing growth in personal loan applications and whether mortgage account declines persist.
- APRA DTI limit implementation in February 2026, particularly whether investor high DTI lending approaches the cap.
Conclusion
Australia’s credit story is splitting into 2 lanes. Personal loans are rising in both official commitments and bureau level applications, while mortgage account growth is softening even as mortgage demand remains active.
The most likely explanation is structural, not surprising: refinancing churn, affordability thresholds, and tighter leverage guardrails are reshaping how households borrow. For borrowers, the takeaway is practical. Treat personal loans as a precision tool with a defined purpose and repayment plan, not as a default funding line.
For reputable lenders like MeLoan, the competitive edge will sit in verification quality, transparent pricing, and disciplined affordability checks, not marketing claims about “easy approval.”
