Fresh data has revealed that borrowers rushed to refinance in February, with the shifting rate outlook driving a sharp push in mortgage demand.
Equifax’s latest Consumer Market Pulse has shown that credit activity lifted again in February, with mortgage inquiries and refinancing emerging as the standout story in a market still digesting shifting interest rates.
The February data pointed to a broad recovery in secured lending, with overall secured credit demand up 5.5 per cent year on year, with mortgages doing most of the heavy lifting.
Mortgage inquiries climbed 8.9 per cent compared with February 2025, while unsecured credit applications rose 4.3 per cent over the same period.
Equifax reported that mortgage demand was not just a one‑month blip, with inquiries up 7.3 per cent year to date versus the same period last year.
New mortgage originations grew 3.6 per cent yoy in February, adding to signs of renewed activity in the housing finance pipeline.
Kevin James, chief solutions officer at Equifax, said the numbers revealed a consumer who was cautious, yet far from retreating.
“It reflects a fairly resilient Australian consumer navigating what is a complex economic environment,” he said.
“The movement in the rate environment early this year has likely been a trigger for consumers to lock in credit and refinancing arrangements now to get ahead of any future rate increases.”
Regional breakdowns showed Queensland and Western Australia posting the strongest growth in mortgage demand in February.
Refinancing takes a third of mortgage activity
Within the headline mortgage uplift, refinancing continues to dominate borrower behaviour.
In February, refinance inquiries accounted for 34 per cent of total mortgage demand, underscoring the amount of activity that was centred on reshaping existing debt as opposed to funding new purchases.
The data found that lenders were working hard to hang onto their customers.
Applications for refinance “upgrades” with the same lender rose 15.2 per cent yoy, indicating that many borrowers were renegotiating terms or restructuring loans without switching providers.
Large non‑bank players were also making inroads into the external refinance market, with a 44 per cent jump in customers moving their loans to these lenders over the year.
James said mortgage activity “remains a primary driver of credit demand” and linked the February spike directly to the changing rate backdrop.
He noted that the refinancing mix was particularly revealing.
“Refinance inquiries made up 34 per cent of total mortgage demand this month, and the dynamics are interesting,” James said.
Cards and personal loans underline debt reshuffle
While mortgages set the tone, the pulse also showed that borrowers were actively reshaping their unsecured debt.
Credit‑card demand rose 13.9 per cent yoy, marking the seventh consecutive month of double‑digit growth in card inquiries.
Yet the number of opened credit‑card accounts remained broadly stable, pointing to strong churn as borrowers chase introductory offers, balance‑transfer deals and rewards rather than materially expanding their card exposure.
James said card trends highlighted how tactical many consumers had become.
“For a seventh consecutive month, demand for credit cards is up and in the double digits, however, at the same time, we have also seen that the number of opened credit card accounts are stable year-on-year,” he said.
Personal loans are also on a rising path, with year‑to‑date demand up 7 per cent compared with the same period in 2025.
James described personal‑loan volumes as being on “an upward trajectory,” attributing the lift to debt‑consolidation appetite as borrowers adapt to higher interest costs and to buy now, pay later providers broadening into personal‑loan products.
He said this evolution was allowing BNPL players to “capture a larger share of the credit appetite” as they shift towards more traditional lending models.
Auto loans lag as novated leasing rises
In contrast to the momentum in mortgages and unsecured credit, auto loans weakened.
Equifax reported that demand for auto loans fell around 9 per cent yoy in February, continuing a downward trend for the segment.
The bureau noted that more consumers appeared to be turning to novated leasing arrangements as an alternative way to finance vehicles, reflecting both cost management and tax considerations.
[Related: Borrowers pivot to savings as rate pressures rebuild]
