Equifax Quarterly Consumer Credit Insights: March 2025
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Unsecured consumer credit applications increased (+5.5% vs March quarter 2024)
- Credit card applications grew marginally (+0.4% vs March quarter 2024)
- Personal loan applications increased (+5.7% vs March quarter 2024)
- Buy now pay later applications grew (+17.8% vs March quarter 2024)
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Secured consumer credit applications were up (+4.3% vs March quarter 2024)
- Mortgage applications increased (+5.2% vs March quarter 2024)
- Auto loan applications also grew marginally (+0.3% vs March quarter 2024)
SYDNEY – May 2025 – Mortgage demand accelerated in Q1 of 2025, driven by consumers seeking to refinance in the wake of interest rate changes. However, Equifax data shows an increase in total mortgage limits in arrears - suggesting that homeowners with larger loans are falling behind, despite the recent rate cut.
Released today by Equifax, the global data, analytics and technology company, the latest Equifax Quarterly Consumer Credit Insights - March 2025 saw increased consumer demand credit across all product types. The largest increases in demand were seen in mortgages, which increased by 5.2% vs the same quarter in 2024, and BNPL, which jumped +17.8% year-on-year.
Kevin James, Chief Solution Officer at Equifax, said: “The comeback in mortgage demand looks likely to continue, with refinancing accounting for 37% of mortgage demand in March. Given the process of refinancing can take time, there will be a cohort of consumers who are planning to change their mortgage provider in the coming months. Additionally, the current turmoil in global markets created by ongoing tariff negotiations could see the Reserve Bank drop interest rates more frequently or by larger margins than originally expected. Anticipation of these rate cuts is likely to drive further demand for refinancing.
“On the other hand, we saw a +9.2% increase in the dollar amount now in 90+ day mortgage arrears. This tells us that people with larger loans are struggling to keep up with payments and falling further behind. In fact, for the first time on record, mortgage loans exceeding $1 million are displaying higher arrears rates compared to all other loan size segments,” Mr James said.
Year-over-year numbers also reveal a significant widening of the traditional gap in refinance market share held by investors compared to other borrower segments. Accounting for nearly 80% of total refinance activity in March 2025, investors are more than twice as likely as owner-occupiers to refinance. This demonstrates a significant appetite for current economic conditions, with investors potentially anticipating further rate reductions.
Additionally, refinance demand is heavily skewed towards older mortgages. Over 30% of all refinance activity observed this quarter originated from mortgages established during the historically low interest rate environment of 2020 and 2021. A significant portion of current refinancing is also attributed to consumers who previously refinanced their mortgages, primarily in 2022 and 2023 when refinancing activity peaked in response to rising interest rates and prevalent refinance offerings. This suggests homeowners are likely capitalising on accumulated equity or seeking more favorable terms after a significant period.
Holiday spending catching up
In addition to mortgages, the change in total limits 90+ days past due also climbed for credit cards (+19.3%), personal loans (18.7%) and auto loans (+7.1%).
“The increase in the outstanding amounts owed by consumers suggests that holiday spending has caught up with people who may have used credit to live beyond their means over the festive season, and weren’t able to make payments as they had planned,” Mr James said.
“Specifically in Q1 2025, Equifax saw the average amount owed per delinquent credit card increase to $7,100 – a marked difference from $6,900 at the same time last year. This further highlights that consumers are struggling to pay off their debts,” he said.
Demand Change Q1 2025
The Quarterly Insights measure the volume of credit applications for credit cards, personal loans, BNPL, mortgages and auto loans.
Unsecured credit demand, comprising credit cards, personal loans and BNPL grew in the March quarter, up +5.5% year-on-year. BNPL led the way with +17.8% growth, followed by personal loans (+5.7%) and credit cards (+0.4%).
Secured credit demand, derived from mortgages and auto loans, increased +4.3% in Q1 2025 compared to the same period in 2024. Mortgage demand (+5.2%) and auto loans (+0.3%) both increased year-on-year in the March quarter.
IMAGE 1: Consumer Macro Credit Demand – Quarterly YOY
Source: Equifax
IMAGE 2: Consumer Credit Applications – By Type (Indexed to Q4 2019)^
Source: Equifax
^The data has been re-indexed from 2019 to account for the recent inclusion of Buy Now Pay Later applications:
Re-indexed data to commence in 2019 (previously 2015)
Added buy now pay later and auto loan credit enquiries as a separate trendline (previously rolled up into personal loans)
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At Equifax (NYSE: EFX), we believe knowledge drives progress. As a global data, analytics, and technology company, we play an essential role in the global economy by helping financial institutions, companies, employers, and government agencies make critical decisions with greater confidence. Our unique blend of differentiated data, analytics, and cloud technology drives insights to power decisions to move people forward. Headquartered in Atlanta and supported by nearly 15,000 employees worldwide, Equifax operates or has investments in 24 countries in North America, Central and South America, Europe, and the Asia Pacific region. For more information, visit www.equifax.com.au or follow the company’s news on LinkedIn.
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NOTE TO EDITORS
The Quarterly Consumer Credit Insights by Equifax measures the volume of credit card, personal loan applications, Buy Now Pay Later, mortgages and auto loan applications that go through the Equifax Consumer Credit Bureau by financial services credit providers in Australia. Credit applications represent an intention by consumers to acquire credit and in turn spend; therefore, the index is a lead indicator. This differs to other market measures published by the RBA which measure credit provided by financial institutions (i.e. balances outstanding).
DISCLAIMER
Purpose of Equifax media releases:
The information in this release does not constitute legal, accounting or other professional financial advice. The information may change, and Equifax does not guarantee its currency or accuracy. To the extent permitted by law, Equifax specifically excludes all liability or responsibility for any loss or damage arising out of reliance on information in this release and the data in this report, including any consequential or indirect loss, loss of profit, loss of revenue or loss of business opportunity.
