AFG Mortgage Index – July 2015

AFG, Australia’s largest mortgage broker, announced a record-breaking volume of $5.1 billion in mortgages processed for the month of June – up 34.5% on June 2014, and 1.7% on last month. This is also AFG’s second highest month ever after achieving volume of $5.2 billion in March this year.

While overall mortgage figures continue to be buoyant, the June figures showed a significant cooling for investment loans – down to 36.9% nationally from a peak of 43.1% in April. The last time overall investment loans were at similar levels was July 2013, when they comprised 35.9% of all mortgages processed.

Investment loans moderated most of all in NSW from 49.8% in May to 41.6% in June. Investment loans had been running at an average of 49.5% of all loans in NSW for the previous 12 months.

Elsewhere in Australia, the same moderating trend was repeated, with investment loans declining in SA from 41.8% to 36.8%, in QLD from 36.1% to 34.1%, in VIC from 36.5% to 35.7% and in WA from 31.8% to 31.2%.

Brett McKeon, AFG Managing Director says: “These figures suggest that APRA controls are starting to take effect, but not at the expense of the overall mortgage market. If this trend continues, it should help allay concerns about overheating in Sydney, in particular, as investment levels there come back into line with the sustainable, long term, national average.”

AFG’s Mortgage Index also shows that non-major lenders are making further headway as they compete for greater market share. Last month saw 30.9% of all mortgages processed for non-major lenders – the highest such figure since 32.5% recorded in December 2014. They are strongest in winning refinance loans (34.8% of all new loans) and weakest at competing for investors, where the major lenders still dominate with 75.5% of all new home loans.

Of new borrowers, 14.2% opted for a fixed rate mortgage last month, compared to 15.2% in May, with 76% of borrowers choosing a standard or basic variable home loan.

Download full report here: AFG – July Mortgage Index


AFG Mortgage Index – Going Forward

Historically AFG has released the AFG Mortgage Index on a monthly basis. Following AFG’s successful listing on the ASX, AFG has determined that the AFG Mortgage Index will be published on a quarterly basis from July 2015 (ie the first quarter will reflect the 3 months ending 30 September 2015)