Big broker writes best month since March 2009

by Mackenzie McCarty06 Jun 2012

One aggregator has seen its mortgage processing figures bounce to a level not seen for three years.

AFG's Mortgage Index shows the company processed over $3bn in loans during May, and general manager of sales Mark Hewitt says interest rate cuts are not the only reason.

"The automatic assumption would be that we’re seeing the effect of the rate cut at the start of May, but that’s only part of the story," Hewitt explained.

"We’re probably also seeing more borrowers turn to brokers to help them get the best deal in an increasingly competitive and complex market."

In addition, Hewitt said that May is traditionally a stronger month, after the public and school holidays in April.

Western Australia managed the largest boost in volumes compared with other states, with home loans processed hitting an all time high of $683m for the month.

AFG brokers in New South Wales wrote $812m worth of loans during May, while Victorian brokers managed $641m and Queensland brokers notched up $627m.

"These figures do not conflict with the softening house price data published late last week. Mortgages are processed before sales are confirmed, so our data is more a snapshot of where we are right now," Hewitt said.

"Reduced property prices and interest rates are bringing more people back into the market, but anecdotally, many potential borrowers are still worried by both the offshore news as well as weakening conditions at home."

AFG said fixed rates remained at close to all time highs, accounting for 19.7% of loans processed.

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