AFG mortgage brokers defy gloom with 40% jump in sales

Larry SchlesingerDecember 8, 2020

AFG mortgage brokers broke in-house records in February, processing a 7,000 loans with a cumulative value $2.8 billion.

This was a 40% increase on the 5,365 loans totalling $2 billion processed in January 2011 and 28% higher than the $2.2 billion processed in February 2010.

The numbers are fairly astonishing given that mortgage lending grew by just 0.5% in January, according to official RBA figures, with annual growth at just over 5%, the lowest figure in the 35 years of record keeping by the RBA.

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, surpassing the previous high of 20.4% for fixed-rate loans recorded in October last year and triple the February 2011 fixed-rate percentage of 6.6%.

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In another first for AFG, the average new home loan in Australia reached $400,000 – up from $385,000 in January and $382,000 in February 2011.

Across the nation, NSW had the highest average new home loan – $471,000, followed by WA at $421,000 and Victoria at $409,000.

“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,” says Mark Hewitt, general manager of sales and operations at AFG.

“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."

During February, major lenders’ share of new AFG mortgage lending dropped from 79% to 76.1%.

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.

 

 

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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