Westpac scraps cash backs for high LVR loans
Westpac has scrapped cash-back offers for borrowers over 80% LVR, as lenders tighten up amid the Covid-19 economic downturn.
Wednesday, July 1st 2020, 10:22AM
The big four lender has written to advisers to notify that it will no longer offer cash back for high LVR lending greater than 80%. The changes came into effect on July 1 according to a notice seen by TMM Online.
Westpac said cash backs on current approvals would be given consideration "on a case-by-case basis where the customer has committed to a property purchase and has a sale and purchase agreement dated on or before June 30, 2020".
One adviser said it was "really not nice out there for first home, over 80% customers". They added: "It's very difficult to get them approved, they get higher rates and now no cash back."
In addition, Westpac third party banking national manager Liz Cannon reiterated that high LVR borrowers would be charged a low equity margin on special rates.
Westpac will only accept applications over 80% LVR for existing customers, and will charge LEM/LMI on the loans.
The bank will still lend over 80% LVR in some circumstances.
Existing customers needing construction loans, or purchasing a new dwelling, will be allowed to go above 80%, as will people refinancing an existing high LVR loan from one property to another.
Customers borrowing to fund "extensive repairs or remediation that is not routine or deferred maintenance", will also be allowed to go over 80% LVR.
Westpac will allow plus 80% loans following a fire, natural disaster, or to bring a property up to new building codes – including rental property standards, weather tightness issues, or seismic strengthening. First Home Loans, previously Welcome Home Loans, for owner occupiers are also exempt.
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