Westpac Group will announce new borrowing terms and conditions for local and foreign residential property buyers on partner visas next Monday.
According to The Australian Financial Review, the impending changes will tighten the assessment of residential values and borrowers’ ability to repay loans, but will ease applications for some applicants with visas and borrowers relying on income from secondary jobs to qualify for loans.
Westpac Group—which includes Bank of Melbourne, BankSA, and St George Bank—holds approximately 23% of Australia’s mortgages, the largest share of interest-only loans (about 46%), and the second largest percentage of investor loans (about 40%).
Lending restrictions to holders of 309 and 820 partner visas will be relaxed. These visas allow partners or spouses of Australian citizens, Australian permanent residents, and eligible New Zealand citizens to reside in Australia.
The Group and its subsidiaries ceased lending to all foreign residential property buyers in 2016, which means it doesn’t accept applications from non-residents, households with foreign self-employed income, and those who hold temporary visas in Australia.
Under the latest measures, 309 and 820 partner visas will be accepted in loan applications with a maximum loan-to-value ratio of 90%, a ten percent increase.
Moreover, the terms of low deposit borrowers with second jobs will be liberalised. Second jobs need to have been held for one year and with the same income, for the income to be acceptable.
Desktop valuations, which are based on computerised or photographic evidence instead of formal valuations, will only be used for applications with a maximum loan-to-value ratio of 90%.