AFG major bank flows steady but regaining ground

Australian Finance Group (AFG) data shows major banks accounted for 60 per cent of lodgements in Q3 financial year 2026, with non-majors at 40 per cent – little changed from 59 per cent and 41 per cent, respectively, in the previous quarter.

Despite that stability at a headline level, the composition of lending highlights where share has shifted over time.

Overall, AFG brokers lodged 40,784 mortgages valued at $29.54 billion, an increase of 22.67 per cent on the same period last year and the strongest March quarter on record.

Competition across sectors

According to AFG’s data, competition varied across key lending segments.

In refinancing, non-majors dropped in market share, accounting for 44 per cent in the latest quarter compared with 49.6 per cent of volumes in Q3 FY22.

Refinancing itself has declined as a share of total flows to 15 per cent – a record low.

A similar pattern is evident in investor lending. Non-majors held 50.7 per cent of investment volumes in Q3 FY22, compared with 43 per cent in the most recent quarter.

At the same time, investor activity has increased as a share of total lending, rising from 26 per cent to 35 per cent over the same period.

In upgrader lending, non-major share has also moderated. From 48.1 per cent in Q3 FY22, non-majors accounted for 44 per cent of upgrader volumes in Q3 FY26.

Upgrader loans themselves have remained elevated, representing 43 per cent of flows in the latest quarter compared with 44 per cent in Q3 FY22.

Interest-only lending shows a similar shift, with non-majors declining from around 49.6 per cent share in Q3 FY22 to 44 per cent currently.

Majors consolidate in first home buyers

First home buyer lending remains more heavily weighted towards major banks.

Non-majors accounted for 39.8 per cent of first home buyer volumes in Q3 FY22, falling to 28 per cent in Q3 FY26.

Over the same period, first home buyers have remained a relatively small portion of total lending, easing from 13 per cent to 12 per cent of flows.

Read more about AFG’s results at Broker Daily sister brand The Adviser.

Strong activity despite higher rates

AFG CEO David Bailey said the aggregator’s results pointed to continued resilience in borrower demand, even as interest rates have moved higher.

He noted the March quarter is typically softer due to seasonal factors, making the outcome more significant.

“In what is a seasonally quieter period due to holiday breaks, this was the strongest March quarter on record for AFG brokers and highlights the role brokers continue to play as trusted advisers in a dynamic lending market,” he said.

Bailey said inflation remains a risk for borrowers, but there has been no clear pullback in activity.

“We recognise potential ongoing inflation risks for borrowers, but we are still seeing strong levels of lodgement activity across the network,” he said.

He attributed this to continued wage growth and generally resilient household balance sheets.

Broad-based activity across states

Lending activity increased across all states compared with the same period last year, although volumes were slightly lower than the December quarter, in line with typical seasonal patterns.

NSW remained the largest market at $9.45 billion in lodgements, followed by Victoria at $8.49 billion and Queensland at $5.46 billion.

Western Australia recorded $4.19 billion; South Australia, $1.94 billion; and the Northern Territory, $23.2 million.

Loan sizes remain elevated

Average loan sizes were higher than a year earlier, with the national figure rising to $724,353 from $674,855.

NSW and Victoria continued to record the largest average loan sizes at $807,607 and $706,949, respectively, up from $782,813 and $666,657 a year earlier.

AFG said loan sizes were relatively stable quarter to quarter, suggesting most of the increase in borrowing capacity occurred earlier in the cycle.

Broker demand remains consistent

Looking beyond the quarter, Bailey said the results reinforced the ongoing importance of the broker channel.

He said demand for brokers has remained consistent across different market conditions, rather than being tied to any single phase of the interest rate cycle.

“Demand for brokers has historically remained strong across cycles, reflecting the critical role they play in delivering better outcomes for their customers,” Bailey said.

[Related: Moneytech joins AFG panel to strengthen SME loan offering]

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