What moves each credit product
Rates, jobs, prices, migration, tax, war and regulation reach every credit product, but not in the same way or the same order.
General information, not legal or financial advice.
A home loan, a credit card and a small loan are hit by the same economy, but not in the same way. A rate rise reaches a variable mortgage at once and a fixed-rate car loan only through the borrower’s budget. Lost jobs lift arrears on every product; whether they turn into losses depends on security. Tax and regulation can halve one product’s growth while leaving the next untouched. We ranked what moves each product, checked the ranking against official data back to the global financial crisis, and set out where each could be in 2031 and 2036. The models, tables and every source are on the method page.
One shock, eight products
How each kind of event outside a borrower’s control has moved lending (L) and arrears (A). Built from the episodes below and the RBA’s research (RDP 2020-03; Financial Stability Review, October 2026). ▲ rises, ▼ falls; two marks, strongly; – little.
| Event | Owner-occupier | Investor | Credit card | Personal loan | Car loan | Small loan | Buy now pay later | Small business |
|---|---|---|---|---|---|---|---|---|
| Cash rate up 1 point | L ▼▼ · A ▲ | L ▼▼ · A ▲ | L – · A ▲ | L ▼ · A ▲ | L ▼ · A ▲ | L ▲ · A ▲ | L ▲ · A ▲ | L ▼ · A ▲▲ |
| Unemployment up 2 points | L ▼ · A ▲▲ | L ▼ · A ▲ | L ▼ · A ▲▲ | L ▼ · A ▲▲ | L ▼ · A ▲▲ | L – · A ▲▲ | L ▼ · A ▲▲ | L ▼▼ · A ▲▲ |
| House prices down 15% | L ▼ · A ▲ | L ▼▼ · A ▲ | – | L ▼ | – | – | – | L ▼ · A ▲ |
| Fuel and energy spike (war, supply) | A ▲ | – | L ▲ · A ▲ | A ▲ | L ▲ electric | L ▲ · A ▲▲ | L ▲ · A ▲ | A ▲▲ |
| Migration surge | L ▲▲ | L ▲▲ | L ▲ | L ▲ | L ▲ | L ▲ | L ▲ | L ▲ |
| Tax change against investors | L ▲ | L ▼▼ | – | – | – | – | – | – |
| Tighter lending rules | L ▼ | L ▼▼ | L ▼▼ | L ▼▼ | L ▼ | L ▼▼ | L ▼▼ | – |
| Pandemic with income support | L ▲ · A held | – | L ▼▼ · A ▼ | L ▼▼ · A ▼ | L ▲ after | L ▼▼ · A ▼ | L ▲▲ | A held |
Three differences explain most of the table. Security: a home loan loses money only when a borrower both loses income and owes more than the home is worth, so housing arrears rise without large losses; unsecured products lose on the first trigger. Rate type: mortgages and business loans are mostly variable, cards and car loans mostly fixed. Who borrows: about 15% of renters, against 4% of mortgage holders, spend more than they earn, so small loans and buy now pay later follow rents and fuel more than the cash rate (RBA).
The top five for each product
Weights are our judgement, out of 100 for each product, with the rest in “other”; the evidence for each is on the method page. What moves arrears differs from what moves lending, so both are ranked.
| Product | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|
| Owner-occupier home loans | Interest rates and serviceability 25 | House prices 20 | Population and migration 15 | Jobs and wages 10 | Buyer schemes 10 |
| Investor home loans | Tax settings 25 | Interest rates 20 | Expected price growth 20 | Macroprudential limits 15 | Rents and yields 10 |
| Credit cards | Substitutes: debit, buy now pay later, redraw 30 | Lending rules 20 | Spending and travel 20 | Household cash flow 15 | Issuer strategy 5 |
| Personal loans | Substitutes: home equity, buy now pay later 25 | Confidence and big purchases 20 | Lending rules 15 | Interest rates 15 | Competition 15 |
| Car loans | Car supply and prices 25 | Tax settings for leases 20 | Confidence and incomes 15 | Interest rates 15 | Fuel and electric shift 10 |
| Small and medium loans | Regulation 35 | Household stress 20 | Income support 15 | Substitutes 15 | Enforcement 5 |
| Buy now pay later | Online and retail spending 25 | Regulation 25 | Merchants and competition 20 | Young households leaving cards 15 | Household stress 5 |
| Small business | Demand and investment cycle 25 | Lenders’ appetite and capital rules 20 | Interest rates 20 | Property values 10 | Tax incentives and policy certainty 10 |
| Product | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|
| Owner-occupier home loans | Unemployment 35 | Repayments to income 25 | House prices and equity 15 | Essentials inflation 10 | Lending standards 10 |
| Investor home loans | Interest rates 25 | Unemployment 20 | Rents and vacancies 20 | Prices and equity 15 | Interest-only expiry 10 |
| Credit cards | Unemployment 40 | Cost of living 20 | Mortgage rates 15 | Applicant quality 15 | — |
| Personal loans | Unemployment 35 | Real incomes 25 | Lending standards 20 | Interest rates 10 | — |
| Car loans | Unemployment 30 | Lending standards 20 | Cost of living and fuel 20 | Used-car values 15 | Interest rates 5 |
| Small and medium loans | Income shocks 25 | Rents and essentials 25 | Repayment caps 20 | Borrower selection 15 | — |
| Buy now pay later | Cost of living and youth jobs 40 | Credit checks 20 | Stacking across providers 15 | Merchant mix 10 | — |
| Small business | Sector shocks 30 | Input costs 20 | Interest rates 20 | Tax debt collection 10 | Property values 10 |
Checked against the past
Change in each product’s yearly growth over each episode, in percentage points (RBA tables D1 and C1; ABS Lending Indicators for new car loans). Read across a row to see one episode land differently on each product.
| Episode | Owner-occupier | Investor | Personal | New car loans | Business |
|---|---|---|---|---|---|
| Global financial crisis 2008 Q3 to 2009 Q4 | −1.2 | −3.3 | −3.5 | −0.4 | −22.9 |
| APRA investor lending benchmark 2014 Q4 to 2016 Q4 | +2.9 | −6.2 | −2.0 | +12.3 | +1.7 |
| APRA interest-only benchmark 2017 Q1 to 2018 Q4 | −1.4 | −2.5 | −1.3 | −19.6 | −0.8 |
| Banking Royal Commission 2018 Q1 to 2019 Q4 | −3.3 | −3.5 | −3.7 | +3.0 | −0.8 |
| COVID-19 2020 Q1 to 2021 Q2 | +2.7 | +1.7 | −1.4 | +37.2 | −1.5 |
| Rate rise cycle 2022 Q2 to 2024 Q4 | −3.6 | −0.3 | +5.8 | +9.0 | −0.5 |
| Latest four quarters | +0.5 | +4.0 | +1.0 | −19.1 | +2.0 |
- Investors move with rules and tax; owner-occupiers barely do. APRA’s 2014 investor limit took 6.2 points off investor growth while owner-occupier growth rose 2.9. In 2026 new commitments fell “driven by investors”, which the RBA ties partly to the Budget’s changes to negative gearing and capital gains tax from 1 July 2027 (RBA, August 2026; Treasury).
- Unsecured credit shrinks in a crisis with income support. In COVID, personal credit fell 12.9% at its low and card balances 23.6%, while arrears fell. Personal credit is still below its July 2019 peak (RBA D1, D2, C1).
- Business credit carries a global crisis. In the GFC, business credit growth fell 23 points to −6.0% while owner-occupier growth fell one point; losses were in business and commercial property, not housing (RBA, September 2009).
- Unemployment, then rates, move mortgage arrears. Housing loans non-performing rose from 0.82% to 1.05% through the 2022–24 rate rises, and are 1.01% now, with unemployment at 4.6% (APRA; ABS).
- Migration moves rents first, then housing. Net overseas migration swung from −85,000 in 2020–21 to +538,000 in 2022–23; rents for new tenants rose 24% from 2020 (ABS; RBA Bulletin).
- Wars and trade arrive through prices. The 2022 energy shock fed the inflation behind 4.25 points of rate rises; the 2026 Middle East shock, four rises to 4.60%. US tariffs in 2025 had a small direct effect (RBA cash rate; RBA, May 2025).
What the data could not do. Fitted to 2016 and tested on 2017–2026, models built on rates, jobs, wages, prices and migration beat a “same as last year” rule for business credit, car loans, credit cards and housing arrears, only just for owner-occupier credit, and not at all for investor or personal credit (method). Those two were moved by rules: APRA’s limits, the Royal Commission, COVID support. That is the finding: for them, policy outweighs the economy.
Politics, without sides
Both major parties have funded first-home buyers’ deposits; they differ most on investor tax and migration (Housing Australia; Population Statement 2025). Those two levers move investor lending and rents more than any other product. Elections themselves matter less: the RBA found uncertainty around elections delays business investment, with little sign of large effects on households (RDP 2016-01). For a lender, the risk is a reversal: a tax or migration setting that changes with a government changes investor demand within a year.
2031 and 2036: three paths
Illustrative only. Not a prediction to rely on, and not advice. We will score them against the outcome each year.
Average yearly growth in each product, and housing loans non-performing. The base starts from the RBA’s August 2026 forecasts — unemployment to 4.8%, inflation back to 2.4% by 2028 — then the Population Statement (migration easing to 235,000 a year) and the 2026 Intergenerational Report. The downside is the RBA’s own severe case, unemployment at 6.3% (FSR); the upside, energy prices fading and unemployment near 4%.
| Product | Now | Base 2027–31 | Downside 2027–31 | Upside 2027–31 | Base 2032–36 |
|---|---|---|---|---|---|
| Owner-occupier credit | 6.2% | 5% to 6.5% | 2% to 4% | 6.5% to 8% | 4% to 5.5% |
| Investor credit | 9.6% | 3% to 5% | −1% to 2% | 6% to 8% | 3% to 4.5% |
| Personal credit | 5.1% | 2% to 4.5% | −5% to 0% | 4% to 6% | 0% to 3% |
| Card balances paying interest | $21.6bn (level) | 0% to 2% | −5% to 0% | 2% to 4% | −1% to 1% |
| Business credit | 10.9% | 6% to 8% | −2% to 3% | 8% to 11% | 5% to 7% |
| Housing loans non-performing | 1.01% | 1.0% to 1.3% | 1.3% to 2.0% | 0.8% to 1.0% | 0.9% to 1.2% |
- Car loans: a rush of novated leases before the electric car tax exemption narrows on 1 April 2027 and again on 1 April 2029, then a step down (ATO).
- Small loans: lending keeps moving from small to medium amount contracts unless ASIC enforces the anti-avoidance rule; arrears stay highest among renters (ASIC REP 805).
- Buy now pay later: slower growth under credit checks since June 2025, and arrears visible in credit files for the first time.
- The swing factors: unemployment for every product’s arrears; investor tax settings and APRA’s debt-to-income limit for investor lending; energy prices for small loans and small business.
Our statistical models, given these same paths, put recessions too gently: a 2.5-point rise in unemployment added only 0.1 point to housing arrears, where the GFC took banks’ impaired and past-due loans from 0.53% to 2.19%. The downside ranges are set from the episodes, not the models (method).
Sources
- RBA, statistical tables C1, D1, D2, E2, F5 and the cash rate (retrieved 10 October 2026). CC BY 4.0.
- RBA, Statement on Monetary Policy, August 2026 and Financial Stability Review, October 2026.
- RBA, RDP 2020-03 (mortgage defaults) and RDP 2016-01 (uncertainty).
- ABS, Lending Indicators, Overseas Migration and Labour Force, August 2026.
- APRA, Quarterly ADI Property Exposures, June 2026.
- Treasury, Budget 2026–27 tax measures and Intergenerational Report 2026; Centre for Population, Population Statement 2025.
- ATO, Electric car discount changes; ASIC, REP 805.