Anticipated Slowdown in New Mortgage Demand Following RBA Rate Increase

Understanding Borrower Caution in the Current Interest Rate Environment

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The Reserve Bank of Australia's (RBA) recent rate hike is projected to further dampen the appetite for new home loans.

Data from Equifax indicates a clear loss of momentum among prospective borrowers, with new mortgage demand slowing sharply from a 10.9% year-on-year rise in Q4 2025 to just 3.6% in Q1 2026.

Month-by-month data underscores this trend: growth dropped from 7.1% year-on-year in January to 3.9% in February, before stalling at -0.2% in March. Equifax's Executive General Manager, Moses Samaha, noted that sustained higher interest rates are acting as a 'handbrake' on new mortgage demand, as Australians increasingly prioritize managing existing debts over taking on new ones.

For existing homeowners, this environment presents both challenges and opportunities. While higher rates may deter new borrowing, they also highlight the importance of reviewing current mortgage terms. Refinancing to secure better rates or more favorable loan features can be a strategic move in mitigating the impact of rising interest rates.

Engaging with financial advisors or mortgage brokers can provide valuable insights into available refinancing options, helping homeowners make informed decisions tailored to their financial circumstances.

Published:Thursday, 7th May 2026
Author: Paige Estritori

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Knowledgebase

Equity:
The value of an ownership interest in an asset or company, after all debts and liabilities are deducted.

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