You may need half the deposit you thought for your next investment

The nation’s largest lender to property investors is looking for more business.

Westpac and its subsidiaries Bank of Melbourne, St George and BankSA, have just reduced the minimum deposits they require from investors from 20 per cent to 10 per cent for interest-only investment loans.Banks

In other words investors who meet certain criteria will be able to have a maximum loan-to-valuation ratio for interest-only loans of 90 per cent.

This offer applies to new purchases, refinancing and loan variations, such as switching from principal and interest repayments to interest only.

It does not apply to owner occupier loans, which will continue to have an interest only maximum loan to value ratio at 80 per cent.

Will Ranken, Westpac general manager for home ownership, said:

“Providing the support and finance to help buyers purchase their next investment property is a key focus of our lending strategy. We believe this change will provide a competitive proposition for investors looking to purchase their next property.”

At the same time scrutiny of household spending is being eased by abolishing the referral of loan applications to separate credit review where expenses are more than 130 per cent of Household Expenditure Measure (HEM) and “no other reason that requires credit assessment is triggered”.

The bank is telling brokers the changes will “save time and provide a quicker turnaround” for loan approval.

Since APRA removed the cap on the proportion of new interest-only lending Westpac haven’t been the only Bank in the Big Four to make a move like this.

Earlier this year ANZ also raised LVR limits for property investors with interest-only loans.

There have also been a series of rate cuts as banks bring their interest rate down in line with the recent cash rate cuts.


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Rita Thomas


is a Property Strategist with an accounting background and over 30 years’ Commercial Banking experience. She is a passionate property investor who enjoys helping her clients create wealth through property investment using Metropole’s strategic approach.
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