Borrowers banking rate cuts instead of cutting repayments, LMG data shows

The report includes both broker data and bank-level insights and shows that even with rates easing, most borrowers aren’t dropping their repayments. In fact, just 1 in 10 variable-rate customers have adjusted them down. The vast majority are maintaining their current payments, effectively using the lower interest rates to pay down their loans faster.

“Most borrowers aren’t easing off, they’re doubling down,” said Ewen Stafford, Executive Director and CEO of LMG. “They’re using this breathing room to get ahead, not spend more. That tells us a lot about where Australians are at, cautious, considered, building buffers, accelerating the paydown of their loan, and setting themselves up. That’s a smart move, and brokers can play a big role in making sure it counts.”

Stafford said the behaviour signals a shift in borrower mindset and a strategic opening for brokers.

“That creates a very real moment for brokers to step in and offer guidance. Clients who are paying more than the minimum monthly repayments may not realise how much room they have to move, whether it’s repricing, restructuring, or unlocking equity.”

The LMG National Mortgage Report draws on loan data from over 6,000 brokers nationally, representing around 15 per cent of the Australian mortgage market, providing one of the most current views on borrower behaviour.

While First Home Buyer activity is on the rise, now accounting for a record 13 per cent of all approvals, overall lending volumes remain subdued. According to the report, this is partly due to borrowers choosing to hold repayments steady rather than reduce them, which slows overall credit growth.

“Unless repayment behaviour shifts, we’re unlikely to see a major lift in lending volumes” Stafford said. But the real story here isn’t volume, it’s mindset. Borrowers are thinking differently. And brokers can help them think even smarter.“ said Stafford.

LMG expects this shift to drive deeper product conversations in the months ahead, with borrowers looking beyond rates, focusing on structure, flexibility and long-term strategy.

“For brokers, this is a moment for brokers to lean in,” Stafford said. “Clients who are quietly paying more than they need to may have more options than they realise - to save, to restructure, or to plan for what’s next.”

He added that brokers are well placed to help Australians make the most of this breathing room this rate cycle has created.

“This isn’t just a blip, it’s a change in how people are thinking about debt. They’re more focused on control, not just cheap rates. Brokers have a chance to lead those conversations,” Stafford said.