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Westpac introduces discount for low LVR loans

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Reporter 4 minute read

Westpac has introduced a discount for mortgagors with a loan-to-value ratio of up 70 per cent. 

In a memo to brokers, Westpac Bank revealed that it will provide a 5 basis point discount on variable and fixed rates on owner-occupier and investment mortgages with a loan-to-value ratio (LVR) of up 70 per cent. 

The discount came into effect on Monday (19 August). 

The big four bank said that pricing discretion approvals are not required to receive the applicable LVR discount, and that the final LVR adjustment is applied by its broker processing unit once the valuation has been completed and the loan has been approved.  


The move follows Westpac making a number of revisions to its credit policy in response to new industry guidance provided by LIXI after its consultation with industry. The changes pertain to the way it calculates income and expenses using the Household Expenditure Measure (HEM) benchmark, and includes a new debt-to-income ratio and referral rule. 

Other amendments were made to serviceability assessments of margin loans, as well tax debt definitions. 

The changes came just days after the Federal Court ruled in its favour in a landmark case against the Australian Securities and Investments Commission regarding alleged breaches of responsible lending obligations in its issuance of home loans through the use of the HEM benchmark. 

Westpac revealed that it will also be making changes to commercial, SME or private wealth submission requirements later this year.

[Related: Westpac revises home lending policy]


Westpac introduces discount for low LVR loans
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