Australian lenders are enthusiastically selling the same mortgage deals that drove the United States to economic ruin.

Subprime mortgages are considered by many as the key factor that kicked off the global financial crisis as well, but Australians banks are leading the charge to sell them once again.

Ratings agency Moody's says local lenders have signed up $3 billion worth of non-conforming home loans in just the last 18 months, leading some to warn that there is only one fate for a rapidly growing bubble.

Economists say there is a clear risk from the kinds of borrowers that non-conforming or subprime loans attract.

People looking for this kind of mortgage are more likely to have prior bankruptcies or defaults in their credit history, be a non-resident, or be looking for jumbo-sized loan.

The ‘non-conforming’ tag applies to those who fall outside of the lenders' mortgage insurance criteria.

Economies smashed during the GFC, USA included, remain wary of subprime mortgage arrangements, but Moody’s says Australian lenders seem happy to fund subprime loans through the sale of residential mortgage backed securities (RMBS).

The analysts say that since the beginning of 2013, there have been 10 new transactions in the RMBS market from non-conforming issuers, totalling about $3 billion.

Given that about $1 billion of the $15 billion in RMBS transactions from the last year could be classified as ‘subprime’, experts say it is an issue to watch.

Australia does have several pieces of regulation in place to avoid a US-style subprime crash, such as the National Consumer Credit Protection Act.

The Act requires lenders to take reasonable steps to verify a borrower's financial position and their ability to repay a loan, to avoid the lack of income verification which underpinned the collapse of the market in the United States.

The US is still reeling from its subprime crisis, and chasing its arbitrators too.

Last week, finance giant Bank of America Merrill Lynch agreed to pay around $US17 billion in settlement and compensation for its role in the crisis.

For some analysts, while Australia’s subprime market is not large enough to do a lot of damage even if many of the loans went bad, there is still too much reliance from households and the larger economy on real estate.

But Australia remains a nation with deep foundations in bricks and mortar, with the latest Australian Bureau of Statistics figures showing residential construction work jumped by 2.2 per cent in the June quarter. This brings the level of new home building up by 9.6 per cent for the year, marking the best back-to-back growth in four years.