Australia's largest mortgage broker has defied data that suggests borrowers are treading cautiously, to record their biggest month in three years.
Yesterday, Australian Finance Group (AFG) announced it had processed more home loans in May than in any month since March 2009.
The AFG Mortgage Index found the company processed over $3 billion in loans during May.
AFG said it handles around 10 per cent of mortgages settled in Australia.
Leading the country was Western Australia, where home loans processed hit an all time high of $683 million for the month.
AFG’s general manager sales and operations Mark Hewitt said the spike in activity could be largely attributed to the rate cut last month.
“The automatic assumption would be that we’re seeing the effect of the rate cut at the start of May, but that’s only part of the story. We’re probably also seeing more borrowers turn to brokers to help them get the best deal in an increasingly competitive and complex market. In addition, May is generally a stronger month, after the public and school holidays in April,” he said.
“These figures do not conflict with the softening house price data published late last week," he continued.
"Mortgages are processed before sales are confirmed, so our data is more a snapshot of where we are right now. Reduced property prices and interest rates are bringing more people back into the market, but anecdotally, many potential borrowers are still worried by both the offshore news as well as weakening conditions at home.”