AFG Home Loans in high demand following record RMBS issue
Resilient borrower demand and elevated house prices led to a solid third-quarter financial year result for mortgage aggregator AFG, with brokers lodging a total of 40,784 mortgages valued at $29.54 billion, marking a year-on-year increase of nearly 23%.
Average mortgage sizes were up more than 7%, as housing supply restraints continue to influence prices across all states and territories. New South Wales and Victoria recorded the highest average loan values and represented the largest markets for AFG in the quarter, followed by Queensland.
National loan-to-value ratios dipped slightly, with the national average LVR sitting at 64%. Variable-rate lending made up 86.5% of all lodgements.
The major banks – Commonwealth Bank, NAB, Westpac, ANZ and their associated brands – accounted for 60% of total lodgements, with non-majors at 40%. Non-majors maintained a 43% share of investment, and 39% of principal and interest volumes. In refinancing, non-majors captured 44% of flows.
“We recognise potential ongoing inflation risks for borrowers, but we are still seeing strong levels of lodgement activity across the network volumes,” said AFG chief executive David Bailey (pictured). “This demand is being driven by continued wage growth and the resilience of household balance sheets.”
Notably, AFG’s white-label offering had the second-highest performance on record, contributing $1.5 billion in lodgements, representing a 79% year-on-year increase.
To fund this surging demand, AFG issued its largest-ever residential mortgage-based securitisation (RMBS) transaction in February. There are now $6.7 billion worth of AFG Home Loans mortgages on its books.
AFG has intentionally targeted the white-label market – which offers higher margins for the group – since NAB's exit from the space. The strategy has drawn criticism for conflicts of interest after AFG removed some lenders from its aggregation panel in 2025.
One lender to be removed, Bluestone Home Loans, was vocally displeased with the move.
“Over the past 18 months, our team put in the work to build strong relationships with AFG brokers, and the results spoke for themselves, with volumes quadrupling in that time. So to be removed by a partner we’ve supported over many years was, understandably, both surprising and disappointing,” Bluestone chief commercial officer Tony MacRae told MPA.
“I don’t think there can be (a conflict), because the aggregator and the manufacturer are not involved in the choice of product with the end client,” AFG’s general manager industry and partnership development Mark Hewitt said in response.
Touching on today's results, Bailey said: Demand for brokers has historically remained strong across cycles, reflecting the critical role they play in delivering better outcomes for their customers."
