Major bank caps investor loans at 80% LVR

by Julia Corderoy09 Jul 2015
The biggest lender of investment loans in the Australian mortgage market, Westpac has announced an 80% LVR cap on investor loans, subject to security property occupancy.

Effective 8 July 2015, the major bank announced that when a loan is originated as an investment property loan product, solely with investment property as security, borrowers will need to provide a deposit of at least 20%. 

In communication sent by Westpac to brokers, obtained by Australian Broker, some combination loans – i.e. investment and owner-occupier – will also be capped at 80% LVR. According to the communication, when a combination loan is originated where there is only one security involved, the cap will apply. 

However, when a combination loan is originated where there are multiple securities involved, as long as at least one of the securities is for owner-occupied purpose, the current policy will apply, not the 80% LVR cap.

Westpac is currently the biggest lender of investment loans in Australia. According to APRA’s latest monthly banking statistics, Westpac funded $150.9 billion worth of loans to investors in May. This represented 32% of the total value of investment loans in May and was 18% above the second largest lender of investor loans, Commonwealth Bank – who funded $127.9 billion worth of investment loans in the month.


  • by Brett of Brisbane 9/07/2015 9:15:26 AM

    I'm just wondering if this is Westpac acting in self interest. The way I understand it, LVR's are 90% if you bring owner occ security as part of the mix, so really, is this just Westpac asking that they get all of the clients business?

  • by Maria Rigoni 9/07/2015 3:24:12 PM

    APRA is overstepping the mark as a prudential regulator.
    So now only well off people are suitable investment property borrowers.
    This country really needs a Royal Commission into the Financial Services sector with the light shining on regulators. Let's examine their performance.

  • by Papery 10/07/2015 9:27:14 AM

    Wpac rarely feature as the stand out option in any product comparison I run & thats not about to change.