The value of interest-only home loans on the books of Australian banks shrunk for the first time in more than seven years last quarter, as a crackdown on higher-risk lending rippled through the mortgage market.

Figures on Tuesday confirmed the banking regulator's tighter rules on mortgage lending were pushing more customers to start paying down debt, and there were also signs of tighter lending to those with skinny deposits.

The total stock of interest-only loans held by the larger banks' contracted by $2.3 billion, to $581 billion, the first decrease since December 2009, figures from the Australian Prudential Regulation Authority showed.

The data also showed approvals of new interest-only lending dipped in the quarter, to about 30 per cent of loans, down from 36 per cent in the previous three months.