Westpac streamlines process for switching banks

The bank emailed mortgage advisers earlier this week outlining its new, streamlined refinancing requirements for customers wanting to move banks and to access like-for-like or smaller products including home loans.

“We're working hard to improve the lending application experience and reduce turnaround times for customers while also ensuring we continue to lend responsibly,” says Sarah Hearn, the bank's marketing, product and sustainability general manager.

“Recently, we updated our serviceability policy to shorten the application process for customers looking to refinance with Westpac on like-for-like consumer products including home loans, personal loans and credit cards,” Hearn told GoodReturns.

“Eligible customer may be able to switch to Westpac at the same or a reduced level of lending using a fast and easy assessment process,” she says.

“They're still subject to criteria such as credit history, affordability calculations and LVR [loan-to-valuation ratio restrictions].”

The email sent to advisers says Westpac's new policy allows it to significantly reduce verification requirements that would usually apply to income and expenses and waives the requirement for three months of transactional statements.

“Note: you are still required to obtain and complete the following: a standard application, including an application form with current statement of position, income and expenses,” the email says.

Westpac also wants evidence of the loans a customer is wanting to shift to it, including limits, balance and payments as well as a responsible lending declaration.

Westpac promised online training webinars so advisers could familiarise themselves with the new criteria.

Banks have said that the introduction of amendments to the Credit Contracts and Consumer Finance Act (CCCFA) from December 2021 had reduced switching banks by about 20%.

While the CCCFA changes did contribute to a noteable slowdown in overall net new mortgage lending, the impact is difficult to gauge because its introduction coincided with the peak in the housing market.

Comments from our readers

On 9 October 2023 at 9:35 am Amused said:

This article fails to mention that in order to switch across to Westpac under this “streamlined refinance process" the client’s loan repayments at Westpac will need to be equal to or less than what they are with the current lender.

With interest rates having increased substantially short of extending the client’s loan term or going onto interest only there is no way the loan repayments will be the same or less that what they are currently paying.

On 9 October 2023 at 1:16 pm Andy the adviser said:

@ Amused - you are totally right. Further, I wonder who takes the fall if it all turns to custard. Is this a way for banks to further push the level of responsibility on to the adviser?

As advisers we still have a duty and obligation to our clients to ensure we are doing the absolute best for THEM. Therefore we MUST still check out all information supplied, and not just rely on what the customer says.

I will still be sending all the information to the bank. That way the onus is still on them.

On 9 October 2023 at 1:32 pm Good Hamish said:

You can demonstrate that it will be cheaper or the same as the repayments after interest rate maturity

On 10 October 2023 at 8:56 am valkyrie6 said:

Good Hamish: I think the point being made here is that it will be near impossible to demonstrate a lower repayment or even the same repayment if a customer is coming off a rate 2.79% and going to a 7.09% rate.

Westpac streamlines process for switching banks

Westpac New Zealand is claiming to be the first of the major banks to use an exemption the government provided to reduce red tape for people wanting to move their mortgage to another bank.

Saturday, October 7th 2023, 6:58AM 4 Comments

Comments from our readers

www.GoodReturns.co.nz