Mortgage Index – April 2010
PROPERTY BUYERS REFINANCE IN RECORD NUMBERS AS SECOND TIER LENDERS RECOVER
Mortgage refinancing hit a record high of 37.2% of all mortgages arranged in March, with increasing numbers of property owners turning away from the major bank groups to arrange new finance with second tier lenders according to AFG, Australia’s largest mortgage broker. The latest AFG Mortgage Index shows that the level of refinancing has risen steadily in recent months. The last time it reached the 37% level was in December 2008.
AFG data also shows lending by the major bank groups (i.e. the ‘Big Four’ banks and their subsidiaries) reduced to 82% during March, with the non majors accounting for 18% of all new loans. This is an increase of 100% on the 9% market share of the non major lenders in March 2009. It confirms the trend identified in ABS data released in February showing that bank lending drew back to 88.1% of all loans in the fourth quarter of 2009, down from a high point of 92.5% during the ‘credit crunch’ conditions in the first quarter of the year.
Mark Hewitt, General Manager of Sales & Operations at AFG says: “Borrowers are making the psychological transition to a post-GFC world. They are once again regarding other lenders as providing reliable and attractive alternatives to the majors. Increased competition can only be good news for property owners and buyers and we are seeing some innovation return to mortgage products and pricing”
AFG Mortgage Index once again confirms the sustained rise of property investors, who accounted for 35.1% of all mortgages arranged in March. Meantime First Home Buyers continue to decline as a proportion of the overall market to 10.4% of market share – compared to 28.1% in March 2009.
Turning to types of loans, Fixed Loans continue near their all time lows with only 2.5% of buyers opting to fix their mortgage in March, compared to the 78.2% who chose variable loan products. Fixed rate products already have several rate rises priced into them, and therefore remain unpopular with most buyers.
AFG has over 2,100 member brokers nationally and over 10% of the total mortgage market (Source: ABS and AFG data).
Download – April Mortgage Index – National