For the first time in recorded history, more than half of broker-originated investment home loans have been lodged with non-major lenders, new data has revealed.
According to the Australian Finance Group’s (AFG) latest quarterly mortgage and competition index for the three months to December 2019 – which is based off data collected from AFG’s network of 3,000 brokers – the market share of non-major lenders grew in all but one listed segment of the mortgage market.
Most notably, the index reported that 51.7 per cent of investment home loan volumes were lodged with non-majors, up from 49.9 per cent in the previous quarter and from 43.5 per cent in the previous corresponding period.
This marks the first time in the index’s history in which non-majors have captured the majority of investor volumes.
Non-major lenders’ share of interest-only (IO) loans also continued to climb, rising from 52.4 per cent in the September quarter to 54.9 per cent.
In the 12 months to December 2019, the share of IO loans lodged with non-majors increased by 12.3 percentage points from 42.6 per cent as at December 2018.
The index revealed that non-majors also received a larger share of loans with principal and interest (P&I) terms, up from 44.5 per cent to 45.1 per cent, and from 41.9 per cent in the December quarter of 2018.
Further, an increasing number of first home buyer volumes flowed through to non-majors, up from 34.9 per cent to 35.9 per cent.
Upgraders also increasingly flocked to non-majors for their finance needs, with non-major share rising from 42.9 per cent to 45 per cent.
The only listed segment in which non-majors lost share was among refinancers, with their proportion of lodgements declining from 55 per cent to 53.4 per cent.
This comes as the overall market share of non-major lenders increased from 46 per cent in the September quarter to 46.9 per cent.
In value terms, surveyed brokers lodged $15.4 billion in home loans over the December quarter, down from $15.7 billion in the previous quarter, but up from $12.9 billion in the December quarter of 2018.