Summary
Subprime mortgages, which are loans given to people with lower credit scores, are becoming more common again in 2025. A report from Equifax shows that more loans are being given to subprime borrowers across different types of lending like mortgages, auto loans, and credit cards. This trend raises concerns about financial stability, similar to issues seen before the 2008 financial crisis.
Key Facts
- Subprime mortgages have increased by 10.7% in 2025 compared to last year, with balances rising by 20.8%.
- Subprime borrowers accounted for 6.5% of all new mortgages this year, slightly up from 6.3% last year.
- There were 17.3 million new auto loans, with 16.7% going to subprime borrowers, marking a 5.1% increase from last year.
- Around 10 million new bank cards were issued to subprime borrowers, up 15.9% from 2024.
- 19.8 million consumer finance loans were made in 2025, with 35.8% going to subprime borrowers, the highest share since 2016.
- The number of student loans has decreased by 6.7%, with a 16.1% drop in the total dollar amount, but subprime student loans rose by 2.4%.
- Equifax's findings are similar to TransUnion's report which noted an increase in subprime borrowing.
