Private Lending Market Pulse: July to October 2026

Private lending in Australia stayed busy through the September quarter, but the shape of the borrowing tells a more useful story than the volume. Borrowers are more stretched, leverage is sitting higher, and second mortgages are getting more expensive. Here is what the numbers show and what I think they mean for borrowers and capital providers.

How much private lending settled between July and October 2026?

About $445 million settled across 190 private loans between 13 July and 8 October 2026. First mortgages made up roughly $412 million across 133 loans, and second mortgages about $34 million across 57 loans. Activity peaked in August at around $221 million, compared with about $101 million in July and about $114 million in September.

The median loan was around $970,000, and just over half of all loans were under $1 million. Volume, though, was concentrated at the top end. The 24 loans of $5 million or more made up over half of the dollars settled. Private lending is serving both the everyday borrower and the larger commercial and development book at the same time.

What are private lending rates in Australia right now?

The median first mortgage rate was about 9.7% p.a., with the middle half of loans priced between 9.0% and 10.7%. The median second mortgage rate was about 21% p.a., with the middle half between 18% and 24%.

First mortgage pricing held broadly steady through the quarter, with monthly medians sitting between about 9.5% and 9.9%. Second mortgages moved the other way. The monthly median went from about 18% in July to about 20% in August and about 23.4% in September. Monthly samples are small, so treat that as directional, but the direction is clear: subordinated money is getting dearer.

How much leverage are private borrowers taking on?

The median loan to value ratio (LVR) across all settlements was 70%, with the middle half between 60% and 75%. First mortgages sat lower, at a median of about 65%. Second mortgages, measured on total LVR, sat at about 74%.

More than half of all settlements (51%) were at 70% LVR or higher, and about a quarter (26%) were at 75% or higher. That is a market where a lot of borrowers are using most of the equity they have.

What are borrowers using private loans for?

Refinance was the largest purpose at 38% of settlements, followed by purchase at 23% and working capital at 18%. Business investment made up 10%, construction 5%, debt consolidation 4% and bridging 2%.

Purpose drives price. Purchase and business investment loans had median rates around 9.5% to 9.7%. Working capital came in at about 18%, debt consolidation at about 21.4% and bridging at about 24%. Working capital, business investment and debt consolidation together accounted for about a third of settlements, which tells you how much private credit is now funding business cash flow, not just property.

Most loans were short. A 12 month term was the most common, at about half of settlements, followed by 6 months at 18%.

Where is the lending happening, and against what security?

Residential property secured 85% of loans, vacant land 10%, commercial 3% and industrial 2%. By state, NSW led with 38% of settlements, followed by Victoria at 24% and Queensland at 22%. Western Australia was 7%, South Australia 5%, the ACT 2% and the Northern Territory 1%. In Queensland, median rates were about 10.45% for first mortgages and 21.1% for seconds, with a median LVR of about 70%.

What does this mean for borrowers and lenders?

My read is that borrowers are more stretched than the headline rate suggests. First mortgage pricing is stable, but leverage is high, refinance is the biggest single purpose and second mortgage pricing is climbing. That combination usually means people are refinancing because they need to, not because they want to.

For capital providers, that changes the job. Senior lenders who stop at 65% LVR will see a lot of good borrowers walk past them. To stay relevant, lenders need either more risk appetite or a partner who can sit behind them, whether that is mezzanine debt or preferred equity.

For borrowers, the practical answer is often structure rather than a single loan. A second mortgage can bridge a short gap, but at around 21% it needs a clear exit. For larger deals, a combined senior plus mezzanine structure, or senior debt with preferred equity on top, can get the total funding where it needs to be at a blended cost that makes more sense than chasing one lender to stretch.

The key is to plan the exit before you sign. Short terms dominate this market, so the refinance or sale that repays the loan should be mapped out from day one.

Methodology

These figures are aggregated from recent private lending settlements we track, covering settlement dates from 13 July to 8 October 2026. All figures are rounded. Rate ranges use percentiles rather than extremes, so a handful of unusual loans do not distort the picture. Monthly figures are directional because the samples are small.

Talk to us about funding

If you are working through a refinance, a purchase or a development and need senior debt, a second mortgage, mezzanine or preferred equity, I am happy to look at it. Email amar@blendedventures.com.au.

General information only, not financial advice. All lending is subject to assessment and approval.