Mortgage Index – April 2015

Biggest month for mortgages in 21 years: March figures

AFG, Australia’s largest mortgage broker, processed $5.2 billion in mortgages last month – the biggest volume in any single month for the company in its 21 years in business.

The $5.2 billion figure represents a 29% increase on March last year. It equates to a total of 11,235 mortgages. AFG has approximately 10% of the total mortgage market.

Volumes were particularly strong in NSW which recorded a 47% increase on March 2014 ($1.9 billion processed) and VIC, where a 30% greater volume was processed ($1.2 billion). Increases reported for other states were SA (23%), QLD (16%) and WA (11%).

Property investment nudged to a new record high of 41.7%, driven by especially strong activity in NSW, where 52.9% of all mortgages were processed for investors.

This investor loan figure compares with 37.7% in SA, 36.7% in Victoria, 33.6% in WA and 33.3% in QLD.

Mark Hewitt, General Manager of Sales and Operations says: ‘What happened in March is really the story of Sydney and Melbourne. Volumes in other cities were strong but unspectacular. The combination of rate expectations, with a traditionally buoyant month for property sales, made March a stand-out month.’

Fixed rate loans comprised 14.2% of the mortgage mix, with 68.8% of borrowers opting for standard variable loans.

Loan to value ratios (LVRs), loans stated as a proportion of the value of a property, remained steady at 67% nationally, relatively lower in NSW (64%) than in VIC and WA (71% in both cases) on account of the typically higher levels of equity provided by investors seeking loans.

First home buying continues at very low levels – 7.4% nationally – especially low in NSW where first home buyers comprise just 2.4% of new borrowers, SA (4.6%) and QLD (5.0%).

Download PDFs