Shifting tides: lower interest rates begin to fuel a hotter lending market

Analysis from Kelvin Davidson of Cotality reveals falling interest rates are fuelling a rise in mortgage lending. April saw $7.6 billion in new loans, marking a significant and sustained increase in borrowing activity.

First home buyers (FHBs) are a key driver, with many successfully securing low-deposit loans. Banks are showing more flexibility on lending criteria, including for borrowers with higher debt-to-income (DTI) ratios. While money is available, the housing recovery may remain modest until the economy strengthens.