Non-Bank home lending increases by 65% leaving traditional banks behind.

Non-Bank home lending increases by 65% leaving traditional banks.

The latest Australian Bureau of Statistics (ABS) Lending Indicators reveals non-bank lenders classified by the ABS as non-ADIs, issued $10.49 billion in new home loans in the June 2026 quarter.

That’s up from $6.35 billion compared to the same quarter last year, an increase of $4.14 billion, or 65.2%, year-on-year.

By comparison, the value of new home lending across major banks and other ADIs, including smaller banks, credit unions and building societies, grew just 2.6% over the same period, from $85.41 billion to $87.61 billion.

Non-bank lending is surging. New home loans from non-bank lenders jumped 65.2% over the year to June 2026.

Non-banks are gaining market share. They now account for 10.7% of new home lending, up from just 4.8% in 2019.

Borrowers are looking beyond traditional banks. Tighter lending conditions and reduced borrowing capacity are encouraging more Australians to explore alternatives.

Non-banks can offer greater flexibility. They may suit self-employed borrowers, investors and those who don’t fit neatly within mainstream bank lending policies.

Greater borrowing capacity needs to be used wisely. The best loan is one that supports your long-term property strategy, cash flow and risk profile.

Mortgage Expert, Nick Burgess, says non-bank lenders are becoming a growing force in Australia's mortgage market.

"Non-bank lenders sit outside APRA's prudential rules, including the 3% serviceability buffer banks have to apply.

Most still apply a buffer of their own, but it's often lower, which can mean more borrowing capacity than you'd get from a traditional bank.

This matters more than ever as this year's rate rises, reduced borrowing power and tighter lending conditions for investors following the Federal Budget have squeezed how much people can borrow.

These factors are pushing more borrowers to look beyond traditional banks, and that’s reflected in the growing value of home loans being issued by non-bank lenders."

Non-bank lending continues to grow even as the overall mortgage market contracts, with the value of non-ADI home loans increasing 3.2% from the March to June quarter, from $10.16 billion to $10.49 billion.

By comparison, the value of total new housing loans fell 5.2% over the same period.