Non-bank lenders have revealed they are sustaining growth through product flexibility, broker distribution, and sharper execution as mortgage demand cools.
Australia’s non-bank lenders are continuing to grow originations, applications, and servicing scale despite a broad mortgage-market slowdown, with Pepper Money, Resimac, and Liberty Financial pointing to flexible credit settings, diversified products, and differentiated customer propositions as key supports.
The results come as the value of new home loans written by non-bank lenders rose 65.2 per cent year on year to $10.49 billion in the June 2026 quarter, according to the ABS Lending Indicators.
By contrast, lending by major banks and other ADIs rose just 2.6 per cent to $87.61 billion over the same period.
Non-banks accounted for 10.7 per cent of new home lending by value, up from 4.8 per cent when the ABS series began in 2019.
The contrast has become more pronounced as system activity softens, with overall mortgage demand 16.4 per cent lower year on year in July.
Yet the three lenders’ latest results show that non-banks are still finding growth channels, although their strategies and exposure to the residential market differ.
Pepper Money posted record total originations of $6.3 billion for the six months to 30 June, up 40 per cent year on year.
Mortgage originations climbed 63 per cent to $4.5 billion, applications rose 35 per cent to $9.9 billion, and total AUM increased 20 per cent to $24 billion.
Resimac reported financial year 2026 group originations of $6.7 billion, up 16 per cent, with total applications rising 17 per cent to $10.5 billion.
Its home loan settlements increased 20 per cent to $5.9 billion, while mortgage applications grew 24 per cent to $9.4 billion, and home loan AUM reached $14.7 billion.
Liberty, meanwhile, originated a record $6.11 billion across the group in FY26, including $3.53 billion in residential lending, its second-highest residential result on record.
Flexible mix supports Pepper
At Pepper, the strongest growth came from prime lending, with prime mortgage originations jumping 83 per cent to $3.6 billion and now accounting for 79 per cent of mortgage flow, compared with 70 per cent a year earlier.
CEO Mario Rehayem told The Adviser that the increase did not represent a departure from the lender’s non-conforming roots.
He added that Pepper was deliberately using its capacity to lend across credit cohorts to manage risk and pursue the areas of greatest opportunity.
“With Pepper, we’re never weathered to one product, nor are we ever weathered to just one customer persona or cohort,” Rehayem said.
“For us, we try to best position where the market is going, if we feel that the market is a little bit hot and there is a bit of risk out there, then we would tend to take some risk out of the book by focusing more on prime.”
He said Pepper could also increase its focus on non-conforming lending when the opportunity was more compelling.
“The growth that you’re seeing in prime is an opportunity for us to just lean or pull the lever of diversification and say, we believe that there is more momentum to be able to capitalise on in prime, and that’s what we’ve done,” Rehayem said.
Pepper has also broadened credit policy and security-property settings while continuing to automate its application, approval, and servicing processes.
The lender’s strategy is also expanding beyond loan origination, with the recent RAMS portfolio migration adding $15.4 billion in AUM and 44,778 customer accounts to Pepper’s platform, lifting its total managed assets to just under $40 billion.
Rehayem said the scale demonstrated the capacity of Pepper’s servicing infrastructure and would generate operating leverage.
“Your cost to serve your book is much lower because you’re getting economies of scale, you’re putting all these loans on the same platform that you have on your originated platform,” he said.
“So that then automatically brings down the costs to serve on a per customer basis for all of our business.”
He said third-party servicing also provided a “capital-light” income stream that could help diversify earnings if new lending conditions deteriorated.
Resimac sharpens mortgage focus
Resimac’s FY26 result followed a strategic refocus on its core mortgage operations, with the lender reporting that strong application flow and deeper relationships helped lift settlements in a competitive market.
CEO Pete Lirantzis told The Adviser that the broker channel had been central to Resimac’s growth through the financial year.
“Brokers were central to Resimac’s success in FY26. More brokers chose to use us more often, reflecting the strength of our proposition and the confidence they have in our ability to support a broader range of customers,” Lirantzis said.
“Their support has been a key driver of our growth, and we remain focused on making it easier for brokers to place more customers with Resimac.”
The lender identified home-loan portfolio growth, improved broker interactions, artificial intelligence, data, and automation as key elements of its strategy.
It is also seeking to deepen channel partnerships, improve decisioning and productivity, and expand complementary offerings, including refinancing and asset finance.
Lirantzis said Resimac’s operating focus was now firmly directed towards scalable mortgage growth and better customer and partner experiences.
“Our focus is clear. We are strengthening home loans by improving the experience for customers and brokers, helping brokers match customers with lending products that suit their needs across all our asset classes, and using technology to lift service levels,” he said.
Liberty sees wider addressable market
While Liberty’s residential book slipped marginally to $7.66 billion from $7.75 billion in FY25, the lender maintained residential originations near historic highs and said its differentiated risk appetite had insulated it from some of the demand weakness affecting banks.
CEO James Boyle told The Adviser that traditional lenders had reported significant declines in home loan demand, but that Liberty had continued lending to customers at a comparable rate following the budget.
“I think most banks have now announced at least a double-digit percentage drop in their demand,” Boyle said.
“We’re not a deposit taker, and we get to set our own risk appetite, which means we’re able to help customers outside the parameters that APRA set.”
Boyle said the current economic environment and more conservative bank settings had expanded the pool of borrowers seeking specialist lending options.
“I think the addressable market for non-banks is improving in the current environment, and that’s why we’ve maintained our momentum, rather than having slowed,” he said.
Find out more about how non-banks are growing and supporting the broker channel in the September supplement, the Broker's Guide to Non-Bank lenders: Small in size: Massive in scale, out on 7 September.
[Related: Liberty achieves record loan originations in FY26]
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