From 56-year-olds consolidating debt to first home buyers leaning on Mum and Dad, March credit trends reveal a lot about what’s coming. Here’s the SME read-between-the-lines version.
Why this matters: For SME owners, cautious consumers mean tighter spending ahead. Whether your customers are rolling debts, tapping home equity, or holding back on big purchases, the credit data offers a useful early signal of what your June quarter trading could look like.
There is a quiet shift happening in how Australians are approaching their finances, and it has implications well beyond the property market.
The Equifax Consumer Market Pulse for March 2026 shows that while overall mortgage demand rose 7.9% year-on-year, the more revealing figure was the gap between those who switched lenders and those who did not. Mortgage upgrades with existing lenders grew by 12.6% year-on-year, nearly double the 6.9% growth rate seen among borrowers switching to a new institution.
Kevin James, Chief Solution Officer at Equifax, says the pattern reflects something broader than just rate-hunting.
“The Equifax Consumer Market Pulse March data appears to suggest that the Australian consumer entered a phase of financial preparedness. Following the global events at the end of February and the subsequent pressure on fuel prices and inflation, we have seen preferences for familiarity.”
Queensland led the way on mortgage upgrades with a 26.9% year-on-year rise, followed by Western Australia at 16.5%. Both states have shown consistent credit strength in recent months.
What the numbers say
The motivations behind those mortgage upgrades are varied. Some borrowers are locking in more competitive rates to offset rising fuel and grocery costs. Others are drawing on equity, whether for home renovations, debt consolidation, or what James refers to as “the Bank of Mum and Dad.”
“Whether they were seeking a more competitive rate to offset rising costs, or accessing equity to renovate or open the ‘Bank of Mum and Dad’, they were doing so within the perceived safety of their existing banking relationships.”
That Bank of Mum and Dad dynamic shows up in the first home buyer data too. Demand from 18 to 25-year-olds rose 11.4% year-on-year nationally, with Queensland recording the highest state-level growth at 14.6%. James suggests the two trends are linked.
“A +11.4% YoY growth in First Home Buyer demand among 18-25 year olds shows that younger buyers are still attempting to enter the market, but the simultaneous rise in older cohorts upgrading their own mortgages can also indicate that this entry is often being facilitated by parents drawing on their own equity.”
For SME owners who operate in home improvement, building supplies, or any sector tied to housing activity, that equity release pattern is worth tracking. When homeowners access funds, they spend, and local trades and retail often see that flow through.
The customer spending signal
Alongside the mortgage data, personal loan demand rose 9.7% year-on-year in March, driven by a 26.7% spike among Australians aged 56 and over. James points to debt consolidation as the likely explanation.
“As costs such as fuel and groceries rise, it appears more mature borrowers are looking to simplify their finances by folding multiple high-interest debts into a single, predictable monthly payment.”
Credit card demand also grew 5.5% year-on-year, with the 18 to 25 cohort leading at 11.7% growth. Notably, younger Australians appear to be choosing traditional credit products over buy-now-pay-later and other alternative platforms, a trend that has been building for several months.
That matters for SMEs that rely on discretionary spending. When older customers are rolling debts into simpler repayments, they are managing cash flow more carefully. When younger customers are loading up on credit cards rather than BNPL, merchants may see different payment behaviour at the point of sale.
Consumer sentiment data published this month adds another layer of caution. The Westpac-Melbourne Institute Consumer Sentiment Index result for April showed weakness across most components, with the unemployment expectations index jumping nearly 10%. Oliver Hume Property Group Chief Economist Matt Bell noted that “nothing makes a consumer hold off on the biggest purchase of your life (property) like the fear of losing your job,” adding that weak auction clearance rates in April are likely to flow through to softer transaction activity in both established and new markets in the June quarter.
James frames the overall picture as one of repositioning rather than retreat. “Australians aren’t necessarily pulling back from credit; they are repositioning it. As we move further into 2026, and depending on world influences in our domestic market, we could expect this focus on ‘known’ safety and debt simplification to remain in the Australian credit landscape.”
For SME owners, the practical takeaway is straightforward. Customers are under pressure but still active. They are thinking harder about every dollar, consolidating where they can, and leaning on trusted institutions and relationships. Businesses that offer reliability, flexibility on payment terms, or services tied to the home improvement and equity-release cycle may find themselves better positioned as the year progresses.
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