Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always consult a licensed financial or mortgage professional before making borrowing decisions.
AFG’s Role in Australia’s Mortgage Aggregation Market
Australian Finance Group (ASX: AFG) is not a lender. It is the country’s largest mortgage aggregator, providing technology, compliance tools, and loan‑panel access to more than 3,700 brokers. When a broker submits a home loan application through AFG’s platform, that data point feeds into one of the richest real‑time pictures of Australian mortgage demand. In 2026, that picture is starkly different from the pandemic‑era stimulus years.
According to a Kalkine analysis of AFG’s H1 FY2026 trading update (released February 2026), total residential settlements reached $38.2 billion across 63,400 loans. While the raw volume is 5.3% lower than the record H1 FY2022 peak, the composition of those loans has tipped in historically unusual directions. AFG’s data now functions as a leading indicator for the broader market, often foreshadowing ABS housing finance figures by four to six weeks.
The broker channel itself now originates 73.2% of all new Australian residential mortgages, based on September quarter 2025 Mortgage & Finance Association of Australia (MFAA) data cited by Kalkine. AFG, with roughly 28% of the aggregation market, sits at the centre of that dominance.
Key Mortgage Market Trends in 2026: Data Deep Dive
The table below pulls together the headline numbers from AFG’s lodgement data, RBA statistics, and CoreLogic pricing. Every figure carries a 2026 timestamp, making this the most current snapshot available as at Q1 2026.
| Metric | H1 FY2025 | H1 FY2026 | YoY Change |
|---|---|---|---|
| AFG residential settlements | $40.1 billion | $38.2 billion | –4.7% |
| Average loan size (AFG) | $602,000 | $603,500 | +0.2% |
| Fixed‑rate share of new lodgements | 12.1% | 6.8% | –5.3 ppts |
| Variable‑rate share | 87.9% | 93.2% | +5.3 ppts |
| Low doc / alt‑doc share | 5.6% | 7.0% | +1.4 ppts |
| Refinancing share of settlements | 34.2% | 28.7% | –5.5 ppts |
| First‑home buyer share (AFG panel) | 14.8% | 16.3% | +1.5 ppts |
| RBA cash rate (end of period) | 4.10% | 3.85% | –25 bps |
| National home value change (CoreLogic) | –0.8% | –2.1% | – |
Sources: AFG H1 FY2026 trading update; RBA Statistical Table F1; CoreLogic Hedonic Home Value Index Feb 2026; Kalkine analysis.
Two dynamics leap out. First, the fixed‑rate mortgage has virtually vanished as a mainstream choice. Second, the refinancing wave that dominated 2023–2024 has eased markedly, replaced by a steadier volume of purchase‑driven lending and a discernible low doc uptick.
Housing Finance Shifts: Fixed‑Rate Retreat and Variable Dominance
In July 2021, fixed‑rate loans hit 46% of new AFG‑lodged business as borrowers locked in sub‑2% rates. Fast forward to March 2026, and fixed‑rate demand sits at 6.8% — the lowest share in AFG’s 30‑year data set. The reason is straightforward arithmetic: the typical 2‑year fixed rate advertised by a major bank in March 2026 is 5.74%, while the sharpest variable rates start at 5.89%. Borrowers (and brokers on AFG’s platform) have concluded that paying a 15‑basis‑point premium to fix offers no meaningful protection when most economists expect another 25 bps of cuts before Christmas 2026.
Kalkine’s sector review notes that major banks have responded by shrinking their fixed‑rate product shelves. NAB and Westpac both trimmed their fixed‑rate offerings in late 2025, leaving only 1‑year and 3‑year terms in some categories. For AFG brokers, this means more time spent educating clients on variable‑rate features — offset accounts, redraw facilities, and split‑loan hybrids — rather than running multi‑product fixed‑rate comparisons.
Variable‑rate dominance also changes the risk profile flowing through AFG’s platform. With 93.2% of new loans carrying a floating exposure, AFG’s lodgement data becomes a more sensitive barometer of household cash flow. Average debt‑to‑income ratios tracked by AFG remain at 5.4x, but the median repayment‑to‑income ratio has eased from 41.2% in mid‑2025 to 39.1% as at February 2026, helped by the single RBA cut in November 2025.
Low Doc Loan Surge: Self‑Employed Borrowers Drive Demand
Australia’s self‑employed workforce has expanded to 2.6 million individuals (ABS Labour Account, December 2025 quarter). Many sole traders and small‑business owners continue to struggle with traditional full‑documentation hurdles — two years of tax returns, precise PAYG‑style records, and an ABN trading history that banks scan with rigid algorithms. AFG’s lodgement data shows that low doc and alt‑doc loans (including BAS‑declared income loans) now represent 7.0% of all new applications, up from 5.6% a year earlier. In absolute numbers, that equals roughly 4,400 low doc applications across AFG’s network in six months, an 18.4% jump.
Why the surge?
- Tighter living‑expense scrutiny: Full‑doc borrowers are seeing household expense benchmarks inflated by HEM‑plus buffers, making self‑employed applicants with discretionary write‑offs look weaker on paper. Accountant‑declared income shortcuts remove some of that friction.
- Lender appetite returning cautiously: Non‑bank lenders and a handful of second‑tier banks have re‑priced low doc products. Interest rate premiums over standard variable have narrowed from roughly 100–120 bps in 2024 to 65–85 bps in Q1 2026, according to comparison data cited by AFG brokers.
- Asset‑rich, income‑complex borrowers: CoreLogic’s –2.1% annual decline masks large regional variation; many self‑employed borrowers hold property with substantial equity, reducing LVR pressure and making them attractive to low doc lenders.
For platforms like LowDoc AU, these figures confirm that alternative documentation lending is not a fringe product but a normalising segment. AFG’s data effectively benchmarks the market: if 7% of applications through the largest aggregation network are low doc, the underlying pool of eligible but under‑serviced self‑employed borrowers is likely much larger.
RBA Rate Outlook and Its Impact on AFG and Borrowers
After holding at 4.35% for 12 consecutive months, the RBA cut the cash rate by 25 bps in November 2025, then paused again in February 2026. The market‑implied yield curve (ASX 30‑Day Interbank Cash Rate Futures, expiring June 2026) priced a 72% probability of a further 25‑bp cut by August as of 14 March 2026.
AFG’s settlement pipeline is a direct indicator of how rate expectations convert into borrowing decisions. In the four weeks following the November 2025 cut, AFG recorded an 8.3% uptick in pre‑approval requests. However, the effect faded quickly as variable rates stabilised, suggesting buyers are responding less to the absolute level of rates and more to the direction of travel. The “mortgage cliff” concerns of 2023–2024 have largely dissipated; AFG brokers report that fewer than 6% of clients rolling off fixed rates face acute hardship, down from 15% in early 2024.
Brokers on the AFG platform note that first‑home buyer sentiment has improved modestly (the 16.3% share in H1 FY2026 is the highest since 2022), aided by state‑government shared‑equity schemes and the federal First Home Guarantee. These buyers, however, are almost exclusively choosing variable rates, which reinforces the macro trend visible in AFG’s data.
Outlook and Broking Sector Trends for 2026–2027
AFG’s management commentary, excerpted in the Kalkine article, points to several structural trends that will shape the broking industry through 2027:
- Technology adoption accelerating: AFG’s “AFG Home Loans” white‑label product now accounts for 9.1% of total lodgements, up from 7.4% a year ago. As brokers move more volume through proprietary platforms, aggregation data becomes even richer and more predictive.
- Private credit and non‑bank growth: Non‑bank lenders captured 14.6% of AFG’s flow in H1 FY2026, up from 11.9% a year ago. The shift reflects tighter wholesale funding conditions for banks and growing private‑credit appetites for niche segments like alt‑doc, SMSF, and commercial property loans.
- Regulatory stability: APRA’s 3% serviceability buffer remains unchanged, and ASIC’s review of broker remuneration was completed in November 2025 with only minor reporting adjustments. The regulatory backdrop now provides a predictable operating environment, allowing brokers to focus on credit guide compliance and product education.
For self‑employed borrowers, the forward trajectory is clear: the low doc market will continue to mature, lender competition will further compress rate premiums, and brokers with AFG‑style aggregation platforms will have deeper panels of alt‑doc options to place complex files.
Frequently Asked Questions (FAQ)
Q: How does AFG track mortgage market trends?
Australian Finance Group operates Australia’s largest mortgage aggregation platform, receiving real‑time application data from over 3,700 brokers. Each lodged loan includes fields on loan purpose, product type, interest rate, LVR, and borrower category. AFG’s quarterly Compass reports and half‑year filings transform that raw data into trend analysis that frequently leads official ABS housing finance statistics by several weeks.
Q: What are the biggest housing finance shifts in 2026?
The three largest shifts are: (1) fixed‑rate lending has fallen below 7% of new mortgages, the lowest in AFG’s recorded history; (2) the refinancing boom has cooled significantly as cashback deals disappear and most borrowers have already repriced; (3) low doc and alt‑doc loans are growing at double‑digit annual rates as self‑employed borrowers seek alternatives to rigid full‑documentation pathways.
Q: Are low doc loans a good option for self‑employed borrowers in 2026?
For many self‑employed Australians, low doc loans have become a practical, if slightly more expensive, bridge to home ownership or business‑secured lending. The rate premium over full‑doc standard variable loans has fallen to 65–85 basis points, and lenders now accept a wider range of income verification documents, including BAS statements and accountant‑declared income letters. Borrowers should still carefully compare loan terms and obtain independent financial advice, because low doc products often carry higher fees and lower maximum LVRs (typically 70–75%).
References
- Kalkine – “AFG Tracks Mortgage Market Trends Amid Housing Finance Shifts” – GNews‑syndicated analysis covering AFG’s half‑year 2026 data, market share dynamics, and broker commentary. https://kalkinemedia.com/au – Credible Australian financial analysis platform with dedicated ASX coverage.
- Australian Finance Group (ASX: AFG) – H1 FY2026 Trading Update – Official ASX lodgement containing settlement volumes, product mix, and broker network statistics. https://www.afgonline.com.au/investors/ – Primary source for all AFG-related data; subject to ASX continuous disclosure rules.
- Reserve Bank of Australia – Statistical Tables F1 (Interest Rates) and E2 (Lending & Credit Aggregates) – Authoritative source for the cash rate, housing credit growth, and borrowing rates. https://www.rba.gov.au/statistics/tables/ – Australia’s central bank; all data official and time‑stamped.
- CoreLogic – Monthly Hedonic Home Value Index (February 2026) – National and capital‑city dwelling value changes, relied upon by Treasury, RBA, and major banks. https://www.corelogic.com.au/ – Industry-standard property data provider.