Effective 8 July 2015, the major bank announced that when a loan is originated as an investment property loan product, solely withinvestment property as security, borrowers will need to provide a deposit of at least 20%.
In communication sent by Westpac to brokers, obtained by Australian Broker, some combination loans – i.e. investment and owner-occupier – will also be capped at 80% LVR.
According to the communication, when a combination loan is originated where there is only one security involved, the cap will apply.
However, when a combination loan is originated where there are multiple securities involved, as long as at least one of the securities is for owner-occupied purpose, the current policy will apply, not the 80% LVR cap.
Westpac is currently the biggest lender of investment loans in Australia. According to APRA’s latest monthly banking statistics, Westpac funded $150.9 billion worth of loans to investors in May.
This represented 32% of the total value of investment loans in May and was 18% above the second largest lender of investor loans, Commonwealth Bank – who funded $127.9 billion worth of investment loans in the month.
