First home buyer activity, buoyed by government initiatives, and ongoing investor activity resulted in record lodgements for LMG in the final quarter of 2025.
New data from Loan Market Group (LMG) has revealed that its brokers lodged record volumes through the final quarter of 2025, as strong demand from both first home buyers and investors bolstered broker activity.
According to LMG’s analysis of national lending flows, mortgage lodgements rose 12 per cent in seasonally adjusted terms over the three months to December 2025 (4Q25) to just under $25 billion (excluding refinancing).
This makes the October–December period the strongest quarter on record for the aggregator, with volumes up 31 per cent compared to the same period last year.
Demand was particularly prevalent in NSW (which was up 12.8 per cent to around $7 billion) and Queensland (up 8 per cent to around $6.5 billion).
The bulk of the uptick came in October, when lodgements were up 15 per cent (to over $8 billion), before falling to $7 billion in November and then rising 4 per cent in December. Owner-occupier demand grew 13 per cent in the quarter, with October seeing a 20 per cent surge in these lodgements.
The swell in home loan demand came in line with the 5 per cent Deposit Scheme expansion. On 1 October, the government removed the income and place limits on the scheme (formerly known as the First Home Guarantee Scheme), which brought forward demand from first home buyers. Government data recently showed that nearly 5,778 guarantees were issued in that month alone, a 48 per cent increase year on year.
Indeed, LMG’s first home buyer lodgements were up 26 per cent quarter on quarter (the strongest growth on record for the segment) and 41 per cent month on month, the data shows, and remained 17 per cent higher in December than pre-expansion levels.
The momentum translated directly into a surge of settlements, which rose 8.2 per cent for the quarter to around $15 billion.
Given the delay between lodgements and settlements, LMG said it was perhaps unsurprising that December saw a 30 per cent year-on-year jump in settlements (circa $5 billion), reflecting the strong follow-through of applications lodged during the October peak.
LMG executive director and CEO, Ewen Stafford, said the data challenges the narrative that borrower demand would fade after an initial October surge: “Many expected activity to fall away once October passed. What we saw instead was borrowers continuing with well-considered plans, supported by brokers, even as sentiment softened.
“The strength we saw into December suggests there’s still meaningful runway carrying into early 2026,” Stafford added and noted that the growth was broad-based across all states rather than concentrated in specific capital city hotspots.
Furthermore, the launch of the federal Help to Buy shared equity scheme on 5 December (which expanded into Western Australia in January) could see higher-than-average loan demand continue. The scheme, which allows eligible participants to purchase a home with as little as a 2 per cent deposit, while the government contributes up to 40 per cent equity, aims to support 10,000 low-to-middle income earners every year.
Investor demand high, but plateauing
While FHBs and owner-occupiers (up 13 per cent for the quarter) drove the majority of growth, investor activity was still strong in 4Q25, although it showed signs of plateauing.
Investor lodgements rose 8 per cent over the quarter, but remained flat through the final months. LMG suggested this could be a result of investors “front-running” FHB demand earlier in the year or cooling interest in the face of potential RBA rate hikes.
Nevertheless, LMG said it expects system housing credit growth to peak just below 7 per cent in early 2026, before slowing as investor activity pulls back.
What are other groups seeing?
The record-breaking performance at LMG is mirrored across the industry, with fellow aggregator Australian Finance Group (AFG) also reporting a historic lift in activity.
According to the ASX-listed aggregator’s latest Mortgage Index report, AFG brokers lodged a record $31.6 billion in home loans during the December quarter – a 25 per cent increase on the previous best second-quarter result.
Like LMG, AFG saw first home buyer participation climb to its highest level since the financial year 2022 (13 per cent), with CEO David Bailey noting that the results reflect sustained borrower confidence and a high reliance on the broker channel, which now holds a market share above 77 per cent.
[Related: First home buyers flock to use refreshed 5% deposit scheme]
