Westpac happy to again take 10 percent deposits for investor loans

Westpac happy to again take 10 percent deposits for investor loans
Westpac happy to again take 10 percent deposits for investor loans

Westpac, the country's biggest lender to landlords, is lowering the size of the deposits it will require from property investors.

The decision partially reverses last year's crackdown.

Westpac and St George has told mortgage brokers the maximum loan-to-valuation ratio (LVR) for new mortgages for property investors would rise to 90 percent, up from 80 percent.

The change means property investors need a deposit of 10 percent of a property's value, compared with 20 percent previously.

Fairfax Media reported Westpac's lending to investors grew only 7.2 percent in the year to March, down from growth of more than 11 percent in the first half of 2015.

The LVR changes bring Westpac into line with rivals. 

Aside from Westpac's move on LVRs, banks are offering more competitive interest rates to property investors, with St George on Monday offering cut-price variable home loan rates of 4.24 percent for investors.

Westpac's move marks a partial reversal from the industry-wide clampdown on investor lending last year, triggered by the Australian Prudential Regulation Authority which was seeking to limit growth in lending to investors to 10 per cent a year to cool the heated property market in Sydney and Melbourne.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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Lvr Loan Deposit

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