Homeowners are demonstrating a disciplined approach to debt management, with around two thirds of mortgage holders reporting that they maintained higher repayment levels after interest rate cuts in 2025.

A Mortgage Choice survey indicates that many borrowers chose not to reduce repayments when rates eased, instead preserving existing payment levels to accelerate principal reduction and build financial buffers.

Only about one quarter of surveyed borrowers opted to lower their repayments to free up cash flow, suggesting a cautious mindset in the face of ongoing economic uncertainty.

The majority of respondents believe they could manage a 25 basis point increase in variable rates, and 35 percent say they could absorb such a rise without changing their spending habits, pointing to improved household resilience.

Mortgage Choice broker Kelly Carter explains that banks assess borrowers at interest rates roughly 3 percent higher than the actual rate offered, which provides a built in buffer and helps many owners manage market fluctuations more comfortably.

Data from the Australian Bureau of Statistics shows home buying activity surged in the first quarter of 2026, with a record increase in the value of first home buyer loans written after the 5 percent Deposit Scheme was expanded late last year.

The average size of a first home buyer mortgage has increased by 8.5 percent, reflecting both higher property prices and a willingness among new entrants to take on larger loans in order to secure a foothold in competitive markets.