Investors continue to dominate the market, taking out over a third of mortgages sold in May, according to a new report released by mortgage broker AFG.
AFG's latest Mortgage Index shows that the largest proportion of mortgages (38 per cent) were arranged for refinancing purposes followed by 36.7 per cent for investors and 9.9 per cent for first home buyers.
Only 15.4 per cent of all mortgages arranged in May were sold to people upgrading or moving home - the lowest recorded for a year, and significantly lower than the 18.0 per cent average for the last six months of 2009.
Mark Hewitt, General Manager of Sales and Operations for AFG noted that the Index shows refinancing at very high levels, as borrowers respond to interest rate hikes by shopping around for better deals.
"The 38.0 per cent figure recorded for May is the highest such figure since October 2008", Hewitt said.
Uncertainty about the future of interest rates is evidenced by the fact that 76.7 per cent of buyers opted for variable loans, with only 2.9 per cent choosing to lock in rates.
Mortgage sales in Queensland and Victoria were more robust than in other states, registering month on month increases of 15 per cent and 9 per cent respectively.