Mortgage aggregator AFG reported that the most active group of borrowers its brokers dealt with in the December quarter were people seeking refinance. The refinance segment accounted for 31 per cent of volumes – up from 25 per cent in the December quarter 2021.
AFG chief executive David Bailey said generous cashback offers were driving inquiries. Most of these cashbacks are being offered by the big banks, and drove an increase in share for the major lenders from 53.5 per cent to 59.6 per cent year-on-year.
Overall, home loan volumes were down 18.4 per cent in the quarter, compared with the previous corresponding period, with the biggest falls in New South Wales and Queensland.
“As anticipated, the dramatic increase in interest rates since May last year has slowed the market,” Bailey said.
Demand for fixed-rate loans has collapsed, falling from 34 per cent of AFG’s volume in the December quarter 2021 to 3.6 per cent in the December quarter last year.
The proportion of first home buyers was 11 per cent.
Among smaller lenders, Macquarie Bank, Great Southern Bank, Bank Australia and Suncorp Bank picked up share among AFG brokers during the quarter.
Bailey said lenders were taking increasingly different approaches when assessing loan applicants.
The average loan originated by AFG brokers during the quarter was A$600,149 and the average loan-to-valuation ratio was 65.4 per cent. This is the lowest LVR in the AFG data set.