The gap between the total amount banks lend for owner-occupied home loans and total household deposits is at $106 billion—close to the levels at the peak of global financial crisis—based on new research by

The report suggests that Australians could be preparing for harsher financial conditions in the near future, despite funds borrowed for home loans and saved in bank accounts at record highs.

According to the report, the amount of money borrowed from banks for owner-occupied home loans has grown at a slower speed versus the amount of money held in household bank deposits.

Indeed, owner-occupied home loan lending by banks has only increased by 7.5%, which is considerably less than household deposits, at 10.4% in the past year.

The total owner-occupied home loans across all banks is at a high of $843 billion. The total deposit from households is also at a record high, coming in at $737 billion.

Graham Cooke, insights analyst at, believes that the trend could mean that consumers are bracing themselves for tougher times.

“Before the GFC, we saw the gap between household bank deposits and owner-occupier home loans widening, which saw a peak of $128 billion more home loans funded than what was being saved by households in bank deposits in early 2008. When the GFC hit by the end of 2008, this gap shrunk to $95 billion.
“From that low point the gap steadily increased again and hit a high of $193 billion in mid-2012,” Cooke said.

He also added that while total household deposits enjoyed a consistent growth rate, the amount of money banks lend for owner-occupied homes dropped.

“This narrowing indicates an increasing preference for holding money in savings and reducing outstanding mortgages over borrowing for owner-occupied property,” he observed.

Cooke pointed out that these could all be early indicators of a cooling property market.

“Australians are clearly concerned about their financial futures and property owners and prospective buyers should be cautious of over-capitalising in the current conditions. And with Westpac the latest to announce an increase in variable home loan rates, now is the time for existing borrowers to examine their current home loan and consider refinancing.”


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