Household debt in Australia rose by $73.5 billion, or 2.1%, in the June quarter 2026, according to the Australian Bureau of Statistics. Almost all of that was long-term borrowing, and the ABS says it was driven by housing loans to both owner occupiers and investors. At the same time, the value of the land and homes households own fell slightly, for the first time since September 2022.
For anyone planning to apply for a car loan, these numbers are a useful reminder of how lenders look at you: not just your income, but every debt you already carry.
Quick answer: what the household debt figures mean for you
Household debt grew $73.5 billion in the three months to June 2026, mostly through home loans, while property values slipped 0.2%. Lenders assess a car loan against your existing repayments and limits, at today's higher rates, so the more debt you already hold, the less room there may be for a new loan.
What the ABS household debt figures show
The figures come from the ABS release Australian National Accounts: Finance and Wealth, June 2026, published on 24 September 2026. For households, the key numbers were:
- Household liabilities rose 2.1% ($73.5 billion), made up of a $72.5 billion rise in long-term loans and a $0.9 billion rise in short-term loans.
- The growth in long-term loans was driven by housing loans, with both investors and owner occupiers adding new housing debt.
- Household wealth rose 1.0% ($201.1 billion) to $19,388.9 billion, mainly because superannuation reserves rose $231.3 billion as share markets performed strongly.
- Land and dwellings fell 0.2% ($28.7 billion), reflecting lower property prices in New South Wales, Victoria and the ACT. The ABS media release notes this was the first fall since September 2022, and that values are still 8.0% higher than a year earlier.
- Total deposits barely moved (down $0.5 billion). Transferable deposit balances, such as everyday accounts, fell $11.0 billion, while other deposits, which include term deposits and savings accounts, rose $10.5 billion.
The ABS media release also says household borrowing reduced the overall growth in household wealth by 0.4 percentage points.
Why household debt can rise while new lending falls
This may look odd next to other ABS data. The Lending indicators release for the June quarter 2026 showed the number of new loan commitments for dwellings fell 5.4%, seasonally adjusted. Both can be true at once. Lending indicators count new loans signed up in the quarter, excluding refinancing. The Finance and Wealth figures measure the total stock of debt households owe. As long as new borrowing outpaces repayments, total household debt keeps growing, even if fewer new loans are written than in the previous quarter.
We covered the slowdown in new lending in our article on new home lending falling in the June quarter, and the drop in personal car finance in car loan lending fell in the June quarter 2026.
How household debt affects your car loan borrowing power
When you apply for a car loan, the lender looks at whether you can afford the repayments. In practice, that means working through your income, your living expenses and every existing debt commitment. A home loan, investment loan, personal loan, buy now pay later account or credit card limit can all reduce the amount a lender may be willing to offer.
A few points to keep in mind:
- Your mortgage repayment counts in full. If your home loan grew recently, or your repayment rose with interest rates, that higher figure is what the lender may use.
- Credit card limits matter, not just balances. Many lenders assess a card at a share of its limit, even if you pay it off each month. Closing or reducing unused limits before applying may help.
- Rates are higher than a year ago. The RBA cash rate target is 4.60%, after a 0.25 percentage point increase effective 30 September 2026. Lenders may assess new loans with a buffer above the actual rate, so higher rates can tighten serviceability across all of your debts.
- Super does not pay the repayments. Superannuation drove most of the June quarter wealth gain, but it is generally not accessible and is not counted as income for a car loan.
If you are unsure how your existing commitments stack up, our guide to household expenses and your loan application explains what lenders check, and the calculators can help you test a repayment against your budget.
What falling property values mean for car buyers
A 0.2% fall in land and dwelling values is small, and values remain higher than a year ago. For most car loans, it has little direct effect: a secured car loan is secured against the vehicle, not your home. Where it can matter is if you were planning to fund a car through your home loan, using redraw, an offset account or a top-up. Lower property values can reduce the equity available, and a lender will still assess the new total debt.
Our article on using your mortgage to buy a car sets out the real cost of that approach, and property values fell in the June quarter 2026 covers the earlier ABS property figures.
Savings shifting into term deposits
The deposit figures show households moved money out of everyday accounts and into term deposits and savings accounts during the quarter. For a car loan applicant, savings help in two ways. A deposit can reduce the amount you borrow, and a steady savings history in your bank statements can show a lender you manage money well. If your savings are locked in a term deposit, check the maturity date before you need the funds for a car purchase.
Our guide on what lenders check on your bank statements explains how lenders read your transaction history.
Steps to take before applying for a car loan
- List every debt you hold, including limits on cards and buy now pay later accounts, and the current repayment on each.
- Reduce or close unused credit limits if you no longer need them.
- Check your credit report before applying. Our guide on your credit score and your car loan rate explains why it matters.
- Avoid lots of applications at once. Each credit application is noted on your credit report.
- Compare lenders on the comparison rate, not only the advertised rate. You can start with our car loans page and the lender profiles.
What to watch next
The RBA's next monetary policy decision is due on 3 November 2026, following its board meeting on 2 and 3 November. Our coverage of the September RBA rate rise and the RBA Financial Stability Review explains the current settings. The ABS Lending indicators for the September quarter 2026 are scheduled for release on 11 November 2026, which will show whether new borrowing kept slowing.
Sources: ABS, Australian National Accounts: Finance and Wealth, June 2026 (released 24 September 2026) and the accompanying media release; ABS, Lending indicators, June Quarter 2026; RBA cash rate target and Monetary Policy Board meeting schedule, checked 13 October 2026.
