HIGHEST FEBRUARY MORTGAGE SALES ON RECORD AS FIXED RATE LOANS PEAK
Average new home loan reaches $400k for first time ever
AFG, Australia’s largest mortgage broker, had its highest February sales on record, processing $2.8 billion of loans. This compares to $2.0 bn in February 2011 and $2.2 bn in February 2010.
In a month when lenders decoupled from the RBA cash rate, announcing out of cycle rate rises, more new borrowers than ever before – 23.2% – chose Fixed rate loans. This surpasses the previous high of 20.4% for fixed rate loans recorded in October last year, and compares to a figure of just 6.6% in February 2011.
AFG Mortgage Index also shows that, for the first time ever, the average new home loan in Australia reached $400k – up from $385k in January and $382k in February 2011. Across the nation, NSW had the highest average new home loan – $471k, followed by WA – $421k and VIC – $409k, which has only recently broken through the $400k barrier.
Mark Hewitt, General Manager of Sales and Operations says: ‘The dynamics of the home loan market are changing in a number of ways. The very good news is that the past six months has seen a steady stream of First Home Buyers return, which is vital to the future of property markets. As well as this, increasing competition among major and non major lenders, and the decoupling of lender rate announcements from the RBA is making the mortgage market a more complex place. This is an environment in which brokers thrive, because borrowers know they really need to shop around for the best deal, and increasingly rely on us to do so. Concern about the future of rates is also the reason why record numbers of borrowers are choosing to fix rates.’
Major lenders saw their market share drop somewhat from 79.0% in January to 76.1% in February. Most of this change was because of an increasing trend among First Home Buyers to opt for non-major lenders – up from 27.4% in January to 29.1% in February.
Download – March Mortgage Index – National