Mortgage Competition Intensifies as Australians Increasingly Rely on Debt
Mortgage competition between first-time homeowners and investors in Australia is expected too remain strong, despite recent pauses in interest rate increases, according to a report by S&P Global credit analyst Erin Kitson on November 24, 2025. The analysis suggests prospective first-time buyers are increasingly needing to take on more debt to enter the housing market, aided by government initiatives like the 5% deposit scheme.
This trend is occurring against a backdrop of growing financial strain for many Australians. A Roy Morgan survey of 60,000 Australians, published in November 2025, revealed that mortgage holders (A$1,342) and renters (A$911) carry considerably higher credit card debt than those who own their homes outright (A$787).
“These patterns suggest that cost-of-living pressures,notably the high expense of rent and mortgage repayments,are key drivers for why many Australians rely on credit to make ends meet,” explained suela Qemal,General Manager of Financial Services at Roy Morgan.
The affordability crisis is impacting consumer behavior, with over one in three Australians surveyed by finder reporting they’ve cut back on personal spending to afford a home loan. Despite these efforts, 35% of respondents expressed doubt they would ever be able to afford to buy a home.
The competitive landscape is further fueled by investor participation,who are less sensitive to interest rate fluctuations due to typically higher incomes and existing property portfolios. This dynamic risks driving up property prices, exacerbating the affordability issue.
Recognizing the severity of the situation, National Australia Bank (NAB) has pledged A$1 billion (US$657 million) to address the housing crisis. In an open letter published in October 2025, NAB CEO Andrew Irvine stated, “Housing is AustraliaS biggest societal and policy challenge,” and affirmed NAB’s commitment to finding solutions, noting that “australia is not building enough homes to provide access to housing for all Australians.”
