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There is a clear divide in the drivers of mortgage markets in the Eastern and Western seaboards, according to figures released today by mortgage brokerage AFG.

The AFG Mortgage Index shows that while investors continue to dominate the NSW, Victoria and Queensland markets, investment interest in WA has been reducing since last December.

In NSW investors account for two out of five new mortgages - a proportion which has held fairly steadily for most of the past year.

Victoria has a marginally lower level of investment interest at just under 40%.

In Queensland mortgages for investors made up about a third of all home loans.

Meanwhile, in WA investment interest is just over 25%.

However, first home buyers are more active in WA than any other state, at around 20% of the mortgage mix.

This is by far outstripping NSW's 13.4%, VIC's 15.2% and even QLD's 16% - a state known for its affordability.

Fixed rates

The Index's figures also show one in four new borrowers chose to fix their home loan rate in March 2012.

In March 2011 fixed rate loans comprised 6.6% of new home loans and in March 2010 just 2.5%.

Mark Hewitt, GM for sales and operations says this is because many borrowers are still concerned about the future of interest rates.

"This nervousness probably also accounts for the weighting of investors in the property market - there's a lot of them proportionally because first home buyers and upgraders are sitting on their hands," he added.

"There's a disconnect between what's happening in the non-mining economy - which is most of us - and out of cycle rate rises. The best thing the RBA could do to stimulate confidence among buyers and upgraders would be to cut interest rates tomorrow," Hewitt said.

For the second month in a row the average new home loan was above $400k.

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