Westpac ditching risky property investors in Australia - Greenlight Mortgages | Vanessa Belton

Westpac ditching risky property investors in Australia

Westpac Group, the nation’s second largest lender, is giving risky property investors less than one month to find another lender amid growing concerns about the impact of rising rates, falling values and oversupply.


It comes as new APRA analysis reveals a sharp spike in higher risk loans by major banks in the three months to the end of June, despite prudential regulators increasing pressure to toughen serviceability.


The analysis reveals a near-three fold increase in the number of loans during the past 12 months that are outside the prudential’s new guidelines on borrowers’ capacity to service their loans.


Westpac’s move comes amid intense pressure on lenders from rising lending costs, tougher prudential controls and the interim findings of the royal commission into banking and financial services, which has already provided humiliating disclosures about shoddy practices across the sector.


Banks are forensically examining their lending books for examples of high risk lending because of pressure from prudential regulators and to pre-empt findings of the royal commission.


The Westpac letters are typically being set to interest only borrowers with multiple properties and high loan to value, usually 80 per cent, or above. The investors often have up to six properties.


Could NZ follow suit? In NZ there is 65% Loan to Value Ration on investment with no sign of changing in the near future. But the good non banks are offering up to 80% at really good rates. Click here to read the full article.

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Thanks for sharing!