Mortgage lenders have made significant progress in bringing down loan approval times, with a large broker group reporting that turnaround times have come down from close to 30 days a few years ago to under 20 days now.
According to the latest AFG Mortgage Index, the average unconditional turnaround time in the March quarter was 17.2 days for the lenders on its panel – a low for the data series. That is down from an average of 17.5 days in the December quarter and the peak of 27.3 days in the March quarter 2021.
Turnaround times are a big issue for brokers and borrowers and there have been some well publicised instances of banks losing business because their mortgage processing was slow. It looks like lenders have got the message.
AFG said the major banks and their subsidiaries accounted for 61.7 per cent of the business written by its brokers during the quarter – up from 60.2 per cent in the December quarter and 57.5 per cent in the September quarter.
The majors had their highest share among first home buyers, at 70.6 per cent, and lowest among refinancers (58.5 per cent).
The share of fixed rate lending plunged to its lowest level in more than 10 years, at 1.6 per cent. Back in 2021, the share was 38 per cent.
“Homebuyers are waiting to see where interest rates head,” AFG chief executive David Bailey said.