The major bank has explained its latest credit policy changes after recent media reports suggested the group was intensifying its crackdown on lending to foreigners.
Changes to Westpac’s credit policy come into effect this Saturday (26 November) and include loosening and clarifying terms around mortgage lending to migrants.
Westpac will now specify which migrants need to have 12 months remaining on their visa to submit low doc loans. Previously, all migrants had to adhere to this policy.
For applicants that hold Australian permanent or temporary visas, Westpac’s product policy currently states that low doc loans are not available for “Migrant lending package customers”. This will be updated, effective 26 November, to clarify which applicants may be entitled to the low doc product.
Westpac also confirmed additional changes to its credit policy, including the clarification of rental history as genuine savings and unacceptable forms of customer contribution.
It is now acceptable to check a minimum six months’ rental ledger history to confirm all payments have been made on time, rather than having to seek a new letter from the agent or refer the deal to CBC.
The only tightening is around unacceptable forms of customer contribution. Westpac will no longer accept written receipts to show income, builders rebates, or vendor savings plans (this used to be discretionary according to the application).
“We remain committed to lending to Australian visa holders and we have made minor adjustments to our application process to make it simpler for brokers,” A Westpac spokesperson told Mortgage Business.
“The changes will help us to efficiently process applications for our customers by ensuring brokers supply all relevant information in the first instance,” they said.
“The changes are no way related to making it more difficult for Australian visa holders to attain finance.”
Westpac’s comments come after the AFR reported this week that the major bank will announce “a new crackdown on local and overseas property buyers, in response to growing pressure to improve the quality of its loan book as lending and regulatory costs squeeze profits.”