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Total lodgement volumes at the aggregator reached record highs for Q4 of the financial year, as the average loan size has surged.
ASX-listed aggregator Australian Finance Group (AFG) has released its Mortgage Index for Q4 of the 2024 financial year (ended 30 June), which found that AFG brokers lodged $23.3 billion in mortgage finance in the quarter.
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This marks AFG’s highest volume of lodgements in a Q4 and the third-largest volume of lodgements in any quarter at the company, surpassed by Q1 and Q2 of 2022 when lodgement volumes exceeded $24 billion.
David Bailey, AFG’s CEO, said that broker activity was “high” over Q4, with the number of applications lodged reaching 36,395, an increase from 32,318 in Q3.
Bailey said that the increase in lodgements was driven by broker contributions from Western Australia and NSW. Western Australia lodgement volumes increased by 22 per cent, according to the CEO, and 18.7 per cent in NSW.
There was also an increase in lodgement volumes from brokers in Queensland (12.2 per cent), South Australia (10.7 per cent), and Victoria (10.4 per cent).
The Northern Territory was the only state or territory to have a reduction in total lodgement volume, down to $13.9 million from $15.4 million.
Average loan size reaches record high
AFG’s average mortgage size increased by 1.9 per cent (or $11,910) from Q3 to Q4, now sitting at $640,605, the largest loan size that AFG’s Mortgage Index has recorded since it began tracking the data.
This coincides with recent data from the Australian Bureau of Statistics (ABS), revealing earlier this week that the average loan size for owner-occupier dwellings reached a record high of $626,055. This is an increase of 0.04 per cent for the ABS, up from $625,791.
Bailey said that Q4 was AFG Home Loans’ “best quarter” since 1Q23, as it made up 7.64 per cent of market share in 4Q24. The CEO said: “This is a pleasing lift from 6.99 per cent in the prior quarter, Q3 2024.”
Speaking on other trends that AFG noticed in its mortgage lending arm, Bailey said that there was a “slight uptick” in customers taking up fixed interest rate loans, increasing from 1.6 per cent in Q3 to 2.3 per cent in 4Q24.
Bailey said that the number of customers servicing a fixed-rate loan is “still well below longer-term averages”. However, Belinda Jackson, digital lender Tiimely Home’s head of retail, said that she expects further increases in mortgagors opting into fixed-rate loans to avoid further interest rate rises.
“While you’re waiting for the interest rates to decrease, if you can get on a sharp fixed rate, there’s potential for savings now rather than waiting and paying at a higher rate until mid-next year so this is one way people may look to save money,” Jackson said.
Lender turnaround times at record speed
According to AFG’s Mortgage Index, lender turnaround times reached an average of 16.4 days from lodgement to unconditional approval, which marks the fastest lender turnaround time since AFG started tracking the metric.
This is a further improvement from 3Q24 when AFG reported an equal record speed of lender turnaround times of 17.2 days. This is the first time that AFG’s index has reported lender turnaround times under 17 days.
Agile Market Intelligence’s monthly Broker Pulse survey in April also demonstrated the improving responsiveness of lenders, finding that the average time taken for lenders to reach an initial credit decision was sitting at an average of 4.2 business days.
[Related: Bank turnarounds accelerate: Broker Pulse]
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