New survey reveals decline in mortgage stress and growing confidence among borrowers amid shifting interest rate landscape
Australian mortgage brokers are reporting a more positive shift in borrower sentiment as households adjust to economic pressures and refinancing becomes slightly more accessible, according to new findings from the Mortgage & Finance Association of Australia (MFAA).
The association’s latest Member Sentiment Survey, conducted in February, reveals signs of reduced mortgage stress and improved outlooks among clients, despite ongoing concerns about the cost of living and loan serviceability.
The national survey gathered responses from 321 brokers, building on earlier research from July 2023 and February and August 2024. For the first time, it included questions exploring borrower sentiment about their financial future.
According to the data, 50% of brokers reported that clients held a “neutral” outlook, while 33% felt “positive” and 17% had a negative view. Optimism was largely attributed to a more favourable interest rate environment, strong property equity and stable employment or income.
Among borrowers with a neutral perspective, key influences included the costs of living and interest rates. For those with a negative sentiment, cost-of-living pressures were the dominant concern, followed by interest rates and housing supply issues.
“While cost of living overall is still a key issue, brokers are reporting that mortgage holders are feeling better about their ability to pay their mortgage or refinance to a better deal,” said Anja Pannek (pictured above), chief executive of the Mortgage & Finance Association of Australia.
“They have been buoyed by strength in property values and an improved interest rate outlook, with the Reserve Bank cutting the cash rate to 4.10% in February.”
Mortgage stress declining
The proportion of brokers who said over 10% of their clients were struggling with repayments fell significantly — from 51% in early 2024 to 24% in the most recent survey. While concerns persist, the data indicates that more households are adapting to financial pressures.
“No doubt clients have worked with their brokers to minimise their existing home loan rates, unemployment has remained low, home loan borrowers are adjusting their household budgets and feeling more positive about their ability to make their payments,” Pannek said.
Refinancing challenges easing
Serviceability requirements continue to restrict some borrowers’ ability to refinance, but conditions appear to be improving. A year ago, 83% of brokers said more clients were finding it harder to refinance; in February 2025, that number dropped to 42%. Over the same period, there was a 31% rise in brokers who said refinancing conditions had remained stable.
“The outlook for interest rates from many economists is now for more interest cuts and sooner – however, the serviceability buffer is still at 3%,” Pannek said. “There is merit in reassessment of the buffer to assist borrowers to refinance to a better deal.”
The MFAA has continued to call for a dynamic buffer system, adjusting in line with movements in interest rates — a position it outlined in a submission to a financial regulatory review in late 2024.
The Australian Bureau of Statistics reported a 12% increase in external owner-occupier refinances in the December 2024 quarter, compared to the prior three months. Brokers also noted an increase in client inquiries following the February 2025 rate cut.
Broker relationships remain strong
Repeat business continues to underpin broker success, with 98% of surveyed brokers stating that existing clients return for finance advice. However, there is also a steady stream of new business, with 95% of brokers reporting clients who were refinancing for the first time, and 97% working with first home buyers.
“These data points are positive indicators of the growth in the mortgage broking industry and how the majority of Australians seeking a home loan are turning to brokers to help them find the best deal that suits their circumstances,” Pannek said.
The survey also found that brokers supported clients in a variety of ways, including securing loan discounts, facilitating lender switches, offering budgeting advice and helping borrowers understand hardship options.
“Whether it’s refinancing, budgeting strategies, or securing a discount on their home loan, mortgage holders know they can rely on brokers to assist them,” Pannek said. “This survey provides valuable data for brokers which they can use to help grow their businesses and ensure our industry continues to thrive.”
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