Mortgage demand fell 14% in June, and first home buyers pulled back hardest: what it means for you

New credit bureau data shows Australian mortgage demand fell 14% in June 2026 compared with a year earlier, the first month this cycle where every state and territory recorded a decline at the same time. First home buyers were hit hardest of any group, with applications down 17.2% nationally. After a run of rate rises and a cooling market, fewer people are even applying for a home loan right now, which changes the picture for anyone still working toward a deposit.

What the data shows

Equifax's Consumer Market Pulse report for June 2026 found mortgage demand down across every part of the country, with no state or age group recording growth. The ACT recorded the steepest fall at 18.6%, followed by Victoria at 15.9% and New South Wales at 15%. Western Australia held up best, still down but by a smaller 8.5%.

Younger borrowers pulled back the most. Demand from 26 to 35 year olds fell 18.2%, and 18 to 25 year olds were down 17.9%, roughly three times the pace of the 5.6% decline among borrowers aged 56 and over. Within that, first home buyer demand fell furthest of all, down 17.2% nationally. Queensland recorded the steepest first home buyer pullback at 20.8%, while Tasmania was the most resilient state at 9.9%.

Why mortgage demand is falling

• Repeated rate rises have squeezed borrowing capacity. A series of cash rate increases since the start of 2026 means the maximum amount many households can borrow has shrunk, which naturally reduces the pool of people applying in the first place.
• Buyer confidence has softened alongside prices. With capital city values easing in recent months, some buyers who could still qualify for a loan appear to be waiting to see where prices settle before committing.
• Younger and first-time borrowers feel rate rises hardest. With smaller deposits and less equity to fall back on than older, repeat buyers, first home buyers and younger borrowers are the most sensitive to changes in what lenders assess they can afford.

What this means for first home buyers

A national pullback in mortgage demand is not purely bad news if you are still actively working toward a purchase. It is worth understanding both sides of it:

• Fewer active buyers can mean less competition at inspections and auctions, which may give buyers who are finance-ready more room to negotiate on price and terms.
• A cooling market is not the same as an easy one. Serviceability assessments and lender criteria have not loosened, so it remains worth checking your borrowing power against current rates rather than assuming approval will be straightforward.
• If rate rises have reduced how much you can borrow, revisiting your budget, deposit timeline, or the price range and locations you are considering can help you stay realistic about what is achievable this year.
• Grants, guarantees, and stamp duty concessions have not changed just because fewer people are applying. If anything, softer competition can be a good time to confirm what you are eligible for and move when you are ready, rather than waiting on the sidelines indefinitely.
• A mortgage broker or lender can walk you through exactly how recent rate changes affect your specific borrowing capacity, since generic national averages will not match every household's situation.

Run the numbers

Use these tools to see how the current rate environment affects your own first home buying plan:

• Borrowing Power Calculator - get a current estimate of what you could borrow, so you know if your target price range is still realistic
• Interest Rate Shock Tester - see how your repayments and borrowing capacity would change if rates moved further from here
• Grant Stacker - check which state and federal grants or guarantees you may be able to combine while you finalise your plans