Volatile conditions continue in the credit market, with one of Australia's biggest mortgage aggregators reporting a strong surge in sales in May, after April's big drop.AFG mortgage brokers wrote 6483 loans last month, which were worth A$2.5 billion. In April, AFG brokers wrote 5489 loans, worth $2.1 billion.So far this year, AFG's month-on-month sales data has shown a 37 per cent fall in January, a 56 per cent rise in February, a 22 per cent rise in March, a 16 per cent fall in April and an 18.8 per cent rise last month.AFG's general manager sales, Mark Hewitt, said a notable feature of mortgage market activity over the past month was the pick-up in investor activity. Property investors accounted for 36.5 per cent of loans written - up from 34.9 per cent the previous month and the highest level in a year.Hewitt said: "It is certainly a buyer's market right now and investors looking at rising yields are probably better insulated from the impact of rising interest rates than other types of buyers."The big banks' share of lending slipped from 82.4 per cent in April to 80.4 per cent last month. Fixed rate loans made up 8.4 per cent of the total - up from 6.4 per cent in April. Broker Mortgage Choice reported that 11 per cent of mortgages sold by its loan writers in May were on fixed rates.The average loan was $388,000 and the average loan-to-valuation ratio was 49.4 per cent.While demand for home loans may be on the rise, more data became available this week which reminds lenders that the ability of borrowers to repay is waning.On Monday, Standard & Poor's said that arrears of 30 days or more on prime loans in securitised loan pools rose to 1.81 per cent in March 2011, from 1.79 per cent in February 2011.And, in a report yesterday, Moody's Investors Service said that in the quarter to March 2011 arrears of 30 days or more increased by 0.25 percentage points, to 1.68 per cent.