Mortgage Index – October 2011


Fixed rate home loans rose sharply in popularity in September, as first home buyers returned strongly to the market, especially in New South Wales and Western Australia.

The AFG Mortgage Index, published today by AFG, Australia’s largest mortgage broker, shows that 16.6% of all new home loans processed in September were fixed rate loans, compared to 9.4% the month before, and even lower figures for most of 2011. The last time fixed rate loans were so popular was in April 2008 when they comprised 18.4% of the product mix.

AFG Mortgage Index also shows a strong return of first home buyers in New South Wales, Western Australia and to an extent Queensland during September. While the national figure of 15.7% of first home buyers is in line with the long term average, in NSW first home buyers accounted for 18.9% of the market, in WA 17.4% and in QLD 15.8%. First home buying activity was more subdued in VIC (13.3%) and SA (10.0%).

Mark Hewitt, General Manager of Sales and Operations says: ‘In September we have seen very aggressive competition, with lenders cutting their fixed rate offers. The combination of more realistic property prices, attractive financing options, and lack of confidence in the share market seems to be coaxing first home buyers and investors back into some markets.’

Non major lenders made further inroads into the market share of the four major banks, especially among first home buyers, 29.3% of whom opted for a non major lender, up from 22.2% in August. Non major products were also more popular with those seeking to refinance and even investors, who are traditionally the least likely to switch from the Big Four. The overall market share of the four major banks and the brands they own is now 80.1%.

Overall sales volume for September was up 12.8% compared to September 2010, with refinancing comprising 38% of loans processed.

AFG has 10% of the national mortgage market (Source: ABS data and AFG figures).

Download – October Mortgage Index – National

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