More than one in four home loans processed last month were for non-major lenders, according AFG. This is the highest figure recorded since the broker group began reporting competitor trends in 2010.
The latest AFG Mortgage Index, published yesterday, shows that non-major lenders have increased their collective share of home loans from 20.7% in March to 26.4% in July.
“This figure may seem unexceptional by international standards,” says Mark Hewitt, general manager of Sales and Operations. “But in Australia, morethan 90% of all home loans are with only four lenders and their subsidiaries.
To be seeing competition at this level is encouraging because it offers greater choice and helps keep rates down, both of which are good news for borrowers.”
Non-major lenders have grown market share among borrowers looking to refinance and among investors, while maintaining their stronger market share among first home buyers.
AFG processed over $3.4b worth of mortgages last month – an increase of 25% over July, 2012. July is traditionally a quieter month for mortgages than August and last month’s strong figure reflects reports of active property markets over the winter.
However, there is no sign of overheating in the mortgage data. The average new home loan last month was $401k, the same figure as last December - and LVR remain steady on 68%.
Fixed home loans comprised 29% of all home loans processed by AFG, not far off the all-time high of 30.7% recorded in April this year.