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Home loan sales have surged to their highest volume in over eighteen months as investors and home buyers rush to take advantage of the most competitive financing offers available in years.
AFG’s latest Mortgage Index shows the broking group processed over $2.7 billion worth of mortgages in August – the highest volume since March 2010.
Refinancing accounted for 38.2 per cent of all mortgages as property owners looked to take advantage of a highly competitive lending environment.
While August figures are typically stronger than previous months, these figures trend well above seasonal expectations.
There was a sharp increase in fixed rate home loans as lenders heavily discounted their rates. Fixed home loans comprised 9.4 per cent of all loans processed compared to 7.9 per cent in July - the highest level since December 2010.
AFG general manager of sales and operations Mark Hewitt said borrower expectations about interest rates shifted significantly during August.
“We’re seeing a lot of refinancing as borrowers take advantage of discounted products.
“But we’d like to see lenders create more flexible and competitive products for the new home building sector. It isn’t just consumer confidence that is holding back this sector, it is also the availability of attractive finance options,” he said.
Along with refinancing, investment is the strongest sector of the market. New South Wales led the nation with 40.8 per cent of all new home loans for investment purposes.
This compares with 38.1 per cent in Victoria, 34.4 per cent in Queensland, 33.5 per cent in South Australia and 33.4 per cent in WA.