Non-majors and fixed rates in favour among home borrowers

Non-majors and fixed rates in favour among home borrowers
Non-majors and fixed rates in favour among home borrowers

Australian Finance Group has released the AFG Mortgage Index for the final quarter of the 2016/17 financial year.

AFG CEO David Bailey noted that the non-major share of the market is now at 35 percent.

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Non-majors and fixed rates in favour among home borrowers

“Significant structural change to the lending market brought about by tighter lending rules has seen increased flows of business to the non-major lenders.”

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Non-majors and fixed rates in favour among home borrowers

“As the majors re-price their mortgages and change lending policies to meet regulatory caps, consumers are turning to mortgage brokers to get a full picture of the choices on offer in such a competitive market,” he said.

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Non-majors and fixed rates in favour among home borrowers

“The non-major lenders are helping fill the void left by some of the majors and consumers are benefiting from the fact that a mortgage broker can offer products from those lenders without a branch network.”

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Non-majors and fixed rates in favour among home borrowers

A series of rate rises and policy changes has also had an impact on the investment market.

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Non-majors and fixed rates in favour among home borrowers

“In what will no doubt be welcome news for the regulator, investment lending has dropped to 31% of our total lending for the quarter as lenders continue to tighten their criteria,” said Mr Bailey.

Refinancing figures are also down from 35% to 29% as re nance options for borrowers with interest only or higher LVR investment loans decrease and others choose to stay put until the market settles.

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Non-majors and fixed rates in favour among home borrowers

Lender policy restrictions have also seen the average loan size fall in every state apart from Queensland.

“The part of the market that has been virtually untouched by regulators and lenders is the principle and interest owner category.

“As a result, those opting to upgrade their homes have increased from 34% to 39% in response to some attractive lending offers,” he concluded.

In a sign that homeowners are picking the bottom of the market for interest rates, the number choosing to fix their rate has jumped significantly to finish the quarter at 23.7%.

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Non-majors and fixed rates in favour among home borrowers

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Non-majors and fixed rates in favour among home borrowers

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Afg Mortgage Index

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