Computer says no - why Westpac stands alone on its lower investor interest rate

Westpac, Australia's largest lender to landlords, remains the only one of the big four banks not to have increased interest rates for property investors over the past week under regulatory pressure over bank exposure to housing.

It seems Westpac is finding it challenging to distinguish between investors and owner-occupiers on its computer system, sources told Fairfax Media.

Banking sources said it might take Westpac several months to work through systems issues to enable it to charge different rates.

This could involve senior members of the IT team recoding some of the banking systems to allow different reference rates even though the bank has created different home loan products for investors and owner-occupiers. 

National Australia Bank will be raising its rates by 0.29 percentage points on interest-only loans taken out by both investors and owner-occupiers, similiarly constrained from charging different rates to investors and owner-occupiers because of technical problems.