Whole Loan Guide Australia 2025: Direct Investment, Lending & Trends

For decades, the Australian lending landscape has been dominated by traditional banks and mortgage-backed securities. But in 2025, the ‘whole loan’ is commanding new attention among investors and lenders seeking direct exposure, greater control, and potentially higher returns. Whether you’re an investor, a fintech lender, or simply curious about how property finance is evolving, understanding whole loans could unlock new opportunities and risks.

What Is a Whole Loan, and Why Does It Matter?

A whole loan is a single mortgage loan that’s sold in its entirety from the originator (typically a bank or non-bank lender) to an investor, rather than being pooled with other loans in a mortgage-backed security (MBS). The investor then owns the entire loan and receives all principal and interest payments, assuming all associated risks and rewards.

• Direct Ownership: Unlike fractional investments or MBS, the buyer controls the entire loan.
• Customisable Terms: Investors may negotiate servicing, modifications, or exit strategies.
• Market Flexibility: Whole loans can be held, resold, or used as collateral for further financing.

In Australia, whole loans are gaining traction among institutional investors, non-bank lenders, and even sophisticated individuals, particularly in commercial property, SME lending, and select residential markets.

How Whole Loans Are Shaping the Australian Market in 2025

The Australian financial system has seen a surge in alternative lending and direct investments. Recent policy adjustments by APRA and ASIC have encouraged non-bank lenders and fintechs, making it easier for them to originate and sell whole loans. As a result, more property developers, business owners, and investors are exploring this model for its transparency and flexibility.

• Fintech Platforms: In 2025, digital lenders like Judo Bank and property fintechs are originating whole loans for direct sale, connecting investors with borrowers without the layers of securitisation.
• Regulatory Updates: APRA’s 2025 guidelines clarify risk retention and disclosure standards for whole loan sales, aiming to protect both investors and borrowers.
• Property Investors: With commercial property markets in Sydney and Melbourne showing signs of recovery post-2024 downturn, whole loans are being used to finance mid-market developments and refinancing deals.

For example, a Brisbane-based private investor recently purchased a $2.5 million whole loan originated by a non-bank lender, securing direct rights to interest and principal repayments from a boutique apartment project. Such deals are increasingly common as investors seek yield and control in a volatile environment.

Risks and Rewards: Is a Whole Loan Right for You?

Whole loans can be compelling, but they’re not for everyone. They require careful due diligence and risk management. Here’s what to consider:

• Pros:
• Higher yield potential compared to MBS or term deposits
• Direct negotiation on terms and servicing
• Transparency over collateral and borrower status
• Cons:
• Higher risk exposure to borrower default or property market downturns
• Liquidity challenges—selling a whole loan isn’t as easy as trading listed securities
• Regulatory complexity, especially for cross-border deals or large portfolios

With the Reserve Bank of Australia maintaining a cautious interest rate outlook for 2025, whole loans could deliver attractive returns in a low-yield world. But investors need to weigh the potential for default, especially in sectors like commercial property or SME lending where volatility remains high.

How to Access Whole Loan Investments in 2025

There are several ways Australians can access whole loans:

1. Direct Purchase from Lenders: Many non-bank and fintech lenders now offer direct sale of whole loans to institutional and wholesale investors.
2. Marketplace Platforms: Digital investment platforms facilitate transactions, often with due diligence tools and portfolio management support.
3. Managed Investment Schemes: Some fund managers pool investor capital to acquire whole loans, offering diversification and professional oversight.

For retail investors, regulatory requirements mean whole loan access is typically limited to those meeting wholesale or sophisticated investor criteria. However, industry advocates are lobbying for broader access, citing transparency and yield benefits.

The Future of Whole Loans in Australia

As Australia’s lending ecosystem continues to evolve, whole loans are likely to play a growing role for both lenders and investors. Expect to see:

• Continued innovation from fintechs and non-banks
• New regulatory frameworks to support transparency and risk management
• Greater use of whole loans in commercial, SME, and specialist lending sectors

For those with the appetite and expertise, whole loans offer a direct, unfiltered pathway into Australia’s lending market—one that’s only set to expand in the years ahead.