Westpac (Westpac Bank) will allow real estate investors to apply for a mortgage at a lower deposit than previously required. The largest lender in Australia is looking for ways to boost the mortgage business. This is the bank’s latest move to the revived real estate investment market, which is increasing the maximum valuation ratio of interest-free loans (LVR) for real estate investors from 80% to 90%. On October 21st, Westpac’s banks, including St. George’s Bank and Bank of Melbourne, informed mortgage brokers about the new policy, and the change will also apply to Westpac’s bank loans. However, the interest-only loans newly issued to owner-occupiers will still be subject to 80% LVR restrictions.
Will Ranken, general manager of the bank’s own home business, said that reducing the difficulty of real estate investor loans is a key part of its loan strategy. “We believe this change will provide a competitive solution for investors interested in buying the next property,” he said. The Melbourne property market has rebounded in recent months as credit policies eased. It is due to the decline in interest rates, the relaxation of restrictions on borrowing requirements, and the victory of the coalition party in the May elections. APRA (Australian Prudential Regulation Authority) took a rare initiative in early 2017, limiting the proportion of newly established interest-only loans, prompting banks to step on loan brakes by raising interest rates and tightening credit policies.
However, at the end of last year, APRA will lift this restriction due to a sharp fall in house prices. ANZ (Australia and New Zealand Bank) also raised the LVR ceiling for real estate investors earlier this year. Bell Potter analyst TS Lim said that real estate prices have bottomed out and banks will try to attract real estate investors, but lenders are still quite cautious. He said: “I think the loan amount will grow, but not as fast as before. People are still very vigilant.” Westpac is Australia’s largest real estate investor lending institution, according to the bank’s latest account in March, it is issued to investors. Nearly 175 billion yuan in loans. Interest-only loans accounted for 31% of the bank’s total mortgages, down from 50% two years ago.
