The home loan market has been tough for the past few years as lenders face fewer properties being bought and sold, many first home buyers are scared off by uncertain interest rate movements and home loan activity has been largely keeping afloat from refinancers.

But through the doom and gloom there were signs of life returning to the home loan market in May. The latest figures by the Australian Bureau of Statistics (ABS) show that 52,000 home loans were financed in May. While this number is far from the average 60,000 per month that was recorded around 2005-2008, it’s the highest number we’ve seen in three years.

There were more first home buyers hitting the market in May, with over 9,000 first home buyer loans financed, a jump from over 7,000 in April. And for the first time this year, the percentage share of first home buyers out of all home loans financed grew to 17.8 percent.

We also saw record numbers of traffic to the RateCity website in May, with almost double (85 percent) the number of home loan enquiries for the month compared to 12 months prior.

It’s too soon to say that this means the end to the slow mortgage market but if this trend continues, it could lead to big changes in Australia’s mortgage landscape.

For instance, lenders are pushing harder to attract new home loan customers with many reducing or waiving upfront fees and negotiating with bigger discounts off interest rates. If the home loan market becomes flooded with activity, lenders may be less inclined to offer individual discounts and competition could reduce between lenders. Lending criteria could also tighten as lenders won’t need to be as generous.

This is the worst-case scenario for borrowers, and it’s unlikely that lenders will go to extreme measures and reduce competition. That’s because of the banking reforms as well as comparison websites like RateCity, making money comparisons easy for borrowers and it’s more affordable to switch to a better deal. With more borrowers switching lenders, completion should continue to improve between lenders, which is great news for borrowers.

It’s a great time for first home buyers who are ready to hit the property market this year. And there are ways to take advantage of the current lending environment such as:

• Shop around for your home loan using credible financial comparison websites like RateCity to compare your home loan to other lenders or find some of the best deals to suit you.

• Knowledge is key so the more you know and understand about the home loan market will increase your chances of successfully negotiating for an even better deal.

• Borrowers should also use the low interest rate environment to get ahead of their home loan and make higher repayments. For instance, by adding just $50 each month to a $300,000 home loan with a projected average rate of 7 percent, you could potentially save over $38,000 over the 30-year loan term and reduce the term by over two years.