Three of the four major banks (ANZ, NAB and Westpac) report on a 30 September financial year and disclosed first-half (six months to 31 March) results in early May 2026. CBA, on a 30 June year-end, reported its 3Q trading update on 14 May. Across the four reports, three themes were consistent and material for any borrower entering the market in the next six months.
Theme one: arrears are rising, slowly
Household 90-day arrears across the four major mortgage books rose on average from 0.87 per cent in 1H FY25 to 1.08 per cent in 1H FY26. The absolute numbers are still low by historical standards (the GFC peak was around 1.4 per cent), but the direction of travel is the point. Westpac's arrears moved the most (up 0.27 percentage points half-on-half), reflecting heavier WA and outer-metro Sydney exposure.
For borrowers, rising arrears matter because credit committees become more cautious about marginal applications. Lenders dial up their internal floors above the APRA buffer. Document standards tighten. Conditional approvals take longer to convert to formal approvals. None of this is visible to a borrower from a rate-comparison website but it is visible in approval data.
Theme two: net interest margins are compressing
Net interest margin, the gap between what a bank earns on lending and pays on funding, fell across all four reporting majors. The average NIM across the four moved from 1.96 per cent in 1H FY25 to 1.82 per cent in 1H FY26, a 14 basis-point compression. Two forces drove the compression: more aggressive front-book pricing to win refinance volume, and rising deposit funding costs as savers chase higher term-deposit rates.
For borrowers this is genuinely good news. NIM compression at the lender means front-book mortgage rates are sharper than they would otherwise be. The gap between front-book and back-book rates at the majors is now wider than any time in the past four years. If you have not had a rate review in 18+ months, the maths is unusually attractive right now.
Theme three: broker share holds at 76+ per cent
The latest Mortgage and Finance Association of Australia figures available when the majors reported, for the December 2025 quarter, showed brokers wrote 76.7 per cent of all new residential mortgages, a record for a December quarter. (Updated 28 September 2026: this paragraph originally quoted 76.4 per cent for the March 2026 quarter, which was wrong. The MFAA's March 2026 figure, released on 10 June after these results, was a record 81.0 per cent.) NAB's investor pack put its specific broker-channel share at 73 per cent of new originations. Westpac's was 78 per cent. ANZ's was 75 per cent.
The structural shift to broker origination has now been the dominant trend for a decade. From the borrower's standpoint the practical implication is the same: an independent broker on a wide panel sees materially more pricing than any single-lender shopper does. The majors compete hardest in the channel where most volume is being written.
Investor commentary worth knowing
- ANZ flagged that 60-90 day arrears on its WA book were rising faster than the national average, attributed to a mining-services slowdown in the Pilbara.
- NAB highlighted SME lending as a focus area for 2H FY26, with the new "NAB Quickbiz" product targeting sub-$500k unsecured business loans.
- Westpac's home-lending head told analysts that "the marginal new application now goes to a broker who has already shopped two or three lenders". Their internal data shows borrowers shopping more, not less, despite tighter approvals.
- CBA's 3Q update noted refinance flows are running at the highest level since 2023, and the bank has been gaining share in the refinance segment specifically.
What it means for you
The combination of NIM compression (sharper front-book rates) and rising arrears (tighter credit standards) cuts in opposite directions. If your file is clean and inside policy, this is an unusually good moment to refinance: the rate gap is wide. If your file has any complexity (self-employed, recent change in employment, dependants since the original loan, BNPL on the credit report), expect more questions and a longer approval cycle than 18 months ago.
The bias for any borrower in mid-2026 is toward starting the conversation earlier. Pre-approvals from the major lenders are taking 5-15 business days from application versus 2-5 a year ago. Auction or contract dates set on the assumption of "approval within a week" are increasingly missing.