Mortgage lender Homeloans Ltd achieved double-digit growth in loan approvals during the December half year but it was not enough to produce any growth in funds under administration. Like a number of other lenders, Homeloans is having to contend with very high levels of early repayment (prepayment) on mortgages.Yesterday, the company reported that for the six months to December loan approvals were up 12.4 per cent, compared with the previous corresponding period.However, total funds under administration fell 1.3 per cent - from A$7.7 billion in December 2012 to $7.6 per cent at the end of the latest half.Homeloans' chief executive, Scott McWilliam, said the fall in funds under administration was the result of higher prepayment levels, as well as run-off from a portfolio of loans that Homeloans acquired in 2012, when it bought the broker Refund Home Loans.Refund was in administration when Homeloans bought it and a number of its brokers had moved elsewhere before the deal was done.Homeloans made a net profit of $3.4 million for the half - down 32.8 per cent from the previous corresponding period.The company said the result should be adjusted for a one-off item in the previous corresponding period, when Homeloans earned a $1 million after-tax profit on the sale of an investment in National Mortgage Brokers.On an adjusted basis, net profit for the half was down 14.1 per cent on the previous corresponding period.McWilliam said the prospects for the business were good, despite the intensity of competition in the mortgage market.Before it acquired Refund, Homeloans distributed through a group of about 30 mobile lenders. It signed more than 50 Refund brokers to the Homeloans brand, greatly increasing its distribution reach.McWilliam said: "The volume is building. We are doing better than we modelled when we bought the business 18 months ago."