Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter

Big four bank updates home lending policy

A major bank has revised its interest rate floor and buffer in response to APRA’s recent regulatory amendments.

Westpac Group has announced that it will reduce its interest rate floor for home loan serviceability assessments from 7.25 per cent to 5.75 per cent and increase its buffer from 2.25 per cent to 2.5 per cent.

The changes, which will be effective for new applications from Tuesday, 16 July, have come in response to the Australian Prudential Regulation Authority’s (APRA) decision to scrap its 7 per cent interest floor and raise its buffer to 2.5 per cent.

This marks the second time Westpac announced revisions to its policy over the past month, after it sought to preemptively amend its guidelines before the reforms were finalised.

The bank had initially announced that it would allow its credit officers to use their discretion when assessing low-risk home loan applications that did not pass the serviceability test, but reversed its decision after holding discussions with APRA. 

Advertisement
Advertisement

PROMOTED FEATURES


Westpac has become the second big four bank to officially amend its serviceability policy, after ANZ announced last week that it would reduce its interest rate floor to 5.5 per cent and increase its buffer to 2.5 per cent.

The CBA and NAB have each told Mortgage Business that they’re currently in the process of reviewing their respective policies.

[Related: Major bank lowers serviceability floor]

Big four bank updates home lending policy
mortgagebusiness

Charbel Kadib

Charbel Kadib is the news editor on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

The major bank has confirmed reports that it has identified 200,000 accounts with incorrect balances that may have led to customers accessin...

The interim CEO of the bank’s institutional arm has announced his retirement, while the bank has made an internal appointment to the role ...

The major bank has partnered with a crowdsourced security company to establish a “bug bounty” cyber security program. ...

FROM THE WEB
podcast

LATEST PODCAST: Responsibilities and responsible lending

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.