Major lenders have made significant inroads into the first home buyer market and are now responsible for nearly four out of every five new home loans, according to figures published today by AFG.
The AFG Mortgage Index shows the proportion of loans processed for non-major lenders in the first home buyer market fell to 21.8% in February, down from 24.8% the month before.
Non-major lenders have traditionally been stronger in the first home buyer sector than among other types of borrowers, such as investors, upgraders and people seeking refinance and non-major market share among first home buyers achieved a high of 33.0% in May last year.
Mark Hewitt, general manager of sales and operations, says Australia’s mortgage market has been less competitive than other developed economies for a long time.
“So it’s of real concern to see the growing dominance of the majors in the only part of the market where there used to be stronger competition. We hope this is something the ACCC take into account in their current deliberations.”
Also in February, fixed rate loans rose dramatically in popularity, with 24.1% of new borrowers choosing to lock in rates, compared to 16.3% in January. The 24.1% figure is the highest recorded by AFG for fixed rates since March 2012, when they accounted for 25.4% of all new home loans.