Westpac cracks down on quality of loan applications

The major bank has announced a new crackdown on local and foreign buyers



Westpac is set to announce tightened property lending rules to customers on Saturday, targeting buyers both locally and overseas.

The announcement comes as it aims to improve the quality of its loan book as lending and regulatory costs cause profit pressures, according to the Australian Financial Review

The bank’s changes are set to target ‘dubious’ sources of income used for loan applications, the AFR reported, and will tighten rules on overseas buyers holding Australian visas. 

Westpac, and its subsidiaries St George Bank and Bank of Melbourne, have introduced changes over the past few months for investor-only home loans and overseas buyers.

The changes follow recent warnings to its mortgage brokers on inaccurate and misleading applications causing delays in response times and increasing costs.

Under Westpac’s tougher rules, Australians on permanent or temporary visas with a minimum of 12 months remaining on their visa to be eligible will "only apply in certain circumstances". 

Lending rules are also tightening on eligibility of migrants for low documentation loans and local borrowers providing evidence on being able to meet their loan repayments. 

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