Banking competition is alive and well, according to mortgage aggregator AFG.Yesterday, AFG reported that 26.3 per cent of the loans written by its brokers in September were funded by "non-majors" - regional banks, mutuals, mortgage specialists and foreign-owned banks. Non-major share has increased from 20.6 per cent in March.Smaller lenders have been particularly strong in the fixed rate segment, where their share has increased from 15.5 per cent in March to 29.2 per cent in September.AFG's general manager of sales and operations, Mark Hewitt, said the non-majors were applying plenty of competitive pressure to the majors, with a high level of loan discounting being the result.Smaller lenders that have picked up share in recent months include Macquarie Bank, ING Direct, Suncorp and AMP.Commonwealth Bank and ANZ have lost ground with AFG's brokers.