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Australia’s challenger banks have increased their share of broker-originated investor loans over the September quarter.
The AFG Mortgage Index, released yesterday, noted that the pricing and policy changes made by the majors saw the non-majors regain two per cent in market share in the investor space over the quarter, a further indication that borrowers are seeking a broker’s help.
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The index reported the total value of home loans processed by AFG brokers for the September 2015 quarter was $14.2 billion, an increase of nearly 16 per cent on the same period last year.
AFG managing director Brett McKeon said a key driver of the strong result was activity from upgraders – owner-occupiers changing properties.
“In the June quarter 28 per cent of the loans we processed were for homeowners making a move but this lifted to 34 per cent for the September quarter,” Mr McKeon said.
“This activity is consistent with the traditional spring buying season which is now well underway,” he said.
“With continued low interest rates and lender policy changes being made around investment and interest only lending, many borrowers are aware the market is changing and are seeking the help of an informed, professional broker.”
The AFG Mortgage Index reported that a shift in requirements for lenders set down by APRA however is having an impact on total flows with investment lending for the quarter down from a three-year average of 38 per cent of total loans processed, to 33 per cent.
“We have noticed in the latter part of the quarter that the percentage of our business comprised of investment lending stabilised at 32-33 per cent so it appears that the last round of changes have now flowed through the system,” Mr McKeon said.
The index showed that fixed home loans were at their lowest level for more than three years at 11.3 per cent of total loans processed for the quarter.
[Related: AFG sees surge in commercial mortgages]
