Australian Finance Group Ltd (ASX:AFG) has released its AFG Index for the third quarter of FY26, with AFG brokers lodging 40,784 mortgages valued at $29.54 billion.
The result represents AFG’s strongest March quarter on record, an increase of 22.67% on the same period last year, underlining resilient borrower demand and the continued preference for mortgage brokers in a competitive lending market.
AFG Chief Executive Officer David Bailey said the quarter’s results despite upward movements in the interest rate cycle, demonstrates that borrower demand remains high, with broker-led competition continuing to support choice across both major and non-major lenders.
“In what is a seasonally quieter period due to holiday breaks, this was the strongest March quarter on record for AFG brokers and highlights the role brokers continue to play as trusted advisers in a dynamic lending market,” he said.
All state activity is higher than the same period last year, but lower than Q2 26, in line with expectations around seasonal trends. New South Wales remained the largest market at $9.45 billion, followed by Victoria at $8.49 billion and Queensland with $5.46 billion.
Western Australia recorded $4.19 billion, while South Australia delivered $1.94 billion and the Northern Territory recorded $23.2 million.
Investor participation remained at 35% of flows, while first home buyer demand eased to 12%. Refinancing continued to taper, falling to its lowest ever level at 15% of lodgements, while upgrader activity lifted to 43%, the highest level of activity seen in four years.
Average mortgage sizes were largely steady in Q3 FY26 across the major states, with New South Wales and Victoria continuing to record the highest average loan values of $807,607 and $706,949 respectively.
Loan-to-value ratios dipped slightly, with the national average LVR sitting at 64%.
Borrowers continued to favour variable-rate lending in Q3 FY26, with standard variable products representing 86.5% of lodgements. Fixed rate lodgements ticked up from 3.2 % to 5.4% but this was largely before the long-range rate outlook changed and fixed rates began to increase.
The major banks and their associated brands accounted for 60% of total lodgements, with nonmajors at 40%. Non-majors also maintained a 43% share of investment, and 39% of principal and interest volumes.
In refinancing, non-majors captured 44% of flows, while remaining highly competitive in interest-only lending with a 44% share.
AFG Securities, AFG’s proprietary lending business, maintained a solid share for the quarter, with $1.5 billion of lodgements, the second highest quarterly performance on record despite a seasonally slower period.
“The result demonstrates the continued strength of our product portfolio,” stated Mr. Bailey.
“AFG Securities lodgements for the quarter represent an increase of 79% compared to the same period last year.”
This sustained momentum serves as a positive leading indicator for settlements in the final quarter of the year and has contributed to the AFG Securities loan book closing the quarter at a record $6.7 billion.
Our record RMBS issuances of $2.2 billion over the past 12 months, together with the successful rollover of all our warehouse facilities translates into a clear line of sight around the cost structures of our near-term funding which supports margin resilience and provides flexibility to access capital markets as conditions allow,” said Mr Bailey.
“We recognise potential ongoing inflation risks for borrowers, but we are still seeing strong levels of lodgement activity across the network volumes,” said Mr Bailey.
“This demand is being driven by continued wage growth and the resilience of household balance sheets.”
“Importantly, demand for brokers has historically remained strong across cycles, reflecting the critical role they play in delivering better outcomes for their customers,” Mr Bailey concluded.
