Mortgage Index – January 2009


Increasing numbers of borrowers are opting to lock in low interest rates according to figures published today by AFG, Australia’s largest mortgage broker. AFG Mortgage Index shows that the proportion of fixed rates bounced up from an all time low of 3.2% in November to 5.7% in December 2008 – an increase of 78%. This is the first time the proportion of fixed home loans, relative to variable loans, has increased since February 2008, as property buyers take advantage of the low fixed rates being offered by some banks.

AFG Mortgage Index shows that mortgage sales in December were stronger than expected, with an increase of 11% in terms of volume of loans arranged compared to December 2007. This was the first month in the whole of 2008 during which mortgage sales out-performed the same month the previous year. The reason for the relatively strong performance was a continued robust demand of first home buyers (21.2%) and continuing strong activity among owners looking to refinance their properties (37.2%).

Mark Hewitt, General Manager Sales and Operations of AFG says: “It would be premature to call a turn-around in the mortgage market based on a single month’s performance, but December figures were an encouraging sign. There is a traditional softening in mortgage sales at this time of year as people enjoy the festive season, but mortgage sales held up more strongly than expected. We expect to see the number of fixed rate loans increase over the next few months as many mortgage holders move to lock in low rates, and first time buyers continue to take advantage of the financial incentives available to them.”

First home buyer demand continued strongly in most states with an increased proportion of first home buyers during December in New South Wales if 29.2% (up from 27.0% in November) and Western Australia of 19.1% (up from 18.1% in November).

AFG has a 10% of the total mortgage market (Source: ABS and AFG statistics).

Download – January Mortgage Index – National

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