the adviser logo

Westpac updates owner-occupied lending policy

by Charbel Kadib4 minute read

The major bank has revised its mortgage lending policy to allow owner-occupied loans to be secured against investment property.

Westpac has informed brokers that it has updated its product policy to allow for the selection of an owner-occupied home loan in instances where the loan is to be secured by a “non-owner-occupied residential property”, effective Tuesday, 19 November.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

The changes will apply where:

  • the primary purpose of the new loan is not income-producing; and
  • the interest on the new loan is not being used as a tax deduction related to an investment.

Westpac noted that it is acceptable for a customer to:

  • Use a non-owner-occupied residential property as security when purchasing an owner-occupied home.
  • Use equity in non-owner-occupied residential property to fund owner-occupier purposes such as renovating an owner-occupied property.

However, the bank will not allow non-owner-occupied residential property to be used as security for bridging loans.

Westpac’s latest changes come less than a month after it announced that it would be lifting the maximum loan-to-value ratio (LVR) for investor loans with interest-only (IO) terms from 80 per cent to 90 per cent (including for any capitalised mortgage insurance premium).

Following the announcement, Will Ranken, Westpac general manager of home ownership, told The Adviser: “Providing the support and finance to help buyers purchase their next investment property is a key focus of our lending strategy.

“We believe this change will provide a competitive proposition for investors looking to purchase their next property.”

Earlier this month, Westpac released its full-year results for the 2019 financial year (FY19), recording a statutory net profit after tax of $6.7 billion, down 16 per cent on FY18.

Subdued activity in the mortgage market contributed to the group’s weak underlying performance, with Westpac’s home loan volumes falling by $14.7 billion (19.5 per cent), from $75.3 billion in FY18 to $60.6 billion in FY19.    

As a result, the bank reported a modest increase in its mortgage portfolio, which grew by approximately $4.5 billion, from $444.7 billion in FY18 to $449.2 billion.

[Related: Westpac eases investor lending policy]

Westpac updates owner-occupied lending policy
westpac logo ta
TheAdviser logo
westpac logo ta

Charbel Kadib

Charbel Kadib


Charbel Kadib is the news editor on The Adviser and Mortgage Business.


You need to be a member to post comments. Register for free today


Anja Pannek CEO PLAN

Anja Pannek named MFAA CEO

The board of the Mortgage & Finance Association of Australia (MFAA) has confirmed that Anja Pannek will be the...

mike felton mfaa ta jdayl5

Aggregator heads reflect on Mike Felton’s legacy

Following on the news that Mike Felton is to retire next month and step down as chief executive of the Mortgage &...

melanie kiely afg ta mzh8zm

AFG non-executive director steps down from board

Australian Finance Group Ltd (AFG) has advised that Melanie Kiely will be stepping down from the AFG board to...

Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more