AFG processes $5.2 billion in March loans - but just 2.4% to first home buyers

AFG, Australia's largest mortgage broker, processed $5.2 billion in home loans last month - it's biggest month in the 21 years it has been in business.

Investor activity in NSW and VIC drove the strong figures.

The $5.2 billion figure represents a 29% increase on March 2014.

AFG estimates it has approximately 10% of the total mortgage market.

Volumes were particularly strong in NSW which recorded a 47% increase on March 2014 ($1.9 billion processed) and Victoria, where a 30% greater volume was processed ($1.2 billion).

Increases reported for other states were SA (23%), QLD (16%) and WA (11%).

Property investment nudged to a new record high of 41.7%, driven by especially strong activity in NSW, where 52.9% of all mortgages were processed for investors.

This investor loan figure compares with 37.7% in SA, 36.7% in Victoria, 33.6% in WA and 33.3% in QLD.

Mark Hewitt, the general manager of sales and operations says what happened in March was "really the story of Sydney and Melbourne".

"Volumes in other cities were strong but unspectacular," said Hewitt.

Fixed rate loans comprised 14.2% of the mortgage mix, with 68.8% of borrowers opting for standard variable loans.

Loan to value ratios (LVRs), loans stated as a proportion of the value of a property, remained steady at 67% nationally, relatively lower in NSW (64%) than in Victoria and WA (71% in both cases) on account of the typically higher levels of equity provided by investors seeking loans.

First home buying continues at very low levels – 7.4% nationally – especially low in NSW where first home buyers comprise just 2.4% of new borrowers, SA (4.6%) and QLD (5.0%.