Lenders outside the four majors accounted for almost a quarter of all loans written by AFG brokers in December driven largely by a surge in popularity amongst borrowers refinancing their existing mortgages.
The total non-major market share in December was 24.3% according to AFG figures on the back of their capturing of 29% of the refinancing market. Non-bank and regional lenders have traditionally been supported by new home owners but the capture of a large chunk of the refinancing market indicates that a new battle front has been drawn.
AFG general manager Mark Hewitt said the surge in popularity of the smaller lenders would keep the pressure on the majors to maintain aggressive pricing.
“This trend will help keep rates competitive,” Hewitt said. “If the expected rate reductions come through over the next quarter, we could see a very different lending environment, supporting the recovery of property markets across Australia.”
AFG’s mortgage index showed that borrowers continue to be attracted to fixed rate products with the proportion of fixed rate loans rising to 19.2% in December, up from 17.2% the month before. The proportion of borrowers locking in their rates peaked in October at 20.4%.