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Westpac to halt consumer mortgages for business purposes

by Tas Bindi5 minute read

The major bank will stop accepting consumer home loans for predominantly business purposes from next week.

Under Westpac Group’s updated consumer credit policy, consumer mortgages (including loan top-ups) will not be accepted if more than 50 per cent of the new loan is expected to be used for business purposes.

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The update comes into effect on 18 June, and changes will be made to the ApplyOnline platform to prevent business purpose loans from being submitted from 19 June.

The revised policy stipulates that in instances where the predominant purpose of the loan is business-related, a business product must be offered and the application must be referred as per Westpac’s existing referral process.


This month, the major bank said that it was in the process of developing its own business products, which it cited as one of the reasons for deciding against renewing its direct referral relationship with small business lender Prospa, alongside low referral volumes.

Westpac’s updated consumer credit policy also clarified that the maximum age of documents provided at the formal application stage is six weeks, not 12 months.

A spokesperson from the major bank told The Adviser: "The change means that customers with business needs are provided with the appropriate product and support via our business banking teams, and ensures we continue to meet our reporting requirements around the provision of capital.

"Additionally, the change is a clarification of policy and is aligned with our other policy requirements."

Earlier this year, Westpac Group announced that brokers would no longer be able to submit personal mortgage applications following changes to its residential lending policy, which also apply to its subsidiaries BankSA, Bank of Melbourne and St. George. 

The major bank also now requires new supporting evidence for applications involving the borrower switch from residential investment to owner-occupied contracts, including a copy of: a utility bill dated within the last three months for property where the mailing address matches the security address; a council rates notice for the current period or water rates dated within the last three months for property where the mailing address matches the security address; or a copy of a current insurance certificate showing property usage.

Westpac made additional changes to its credit policy earlier this year, requiring borrower expenses to be captured at an “itemised and granular level” across 13 different categories and include expenses that will continue after settlement as well as debts with other institutions.

Updated at 1:10 AEST 14 June 2018: Added statement from Westpac

[Related: Westpac cuts referral ties with Prospa]

Westpac to halt consumer mortgages for business purposes
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Tas Bindi

Tas Bindi


Tas Bindi is the features editor for The Adviser magazine. 


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