Westpac dumped from First Home Loan Deposit Scheme

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on November 28, 2019
Westpac dumped from First Home Loan Deposit Scheme

Photo by Aaron Barnaby on Unsplash

In what is turning out to be a very bad week for the bank, Westpac has allegedly been axed as the second major lender for the governments’ First Home Loan Deposit Scheme over reputational risk concerns.

News Corp reports Westpac insiders told The Australian the bank had expected to be approved as the second major lender for the scheme, but understood it would now be excluded in the wake of money laundering allegations against it.

On Tuesday, NAB got the green light from the National Housing Finance and Investment Corporation (NHFIC) to support the scheme.

The Australian understands Westpac’s bid was one of the two best applications reviewed by the NHFIC under strict evaluation criteria, one of which included “the reputation of the respondent”.

According to NHFIC’s request for proposal, lenders were asked to provide details of “any regulatory matter (in the last five years), or any other matter that has had or may have a material adverse effect on the reputation of your organisation. This includes any claims, litigation or threatened litigation and any investigation or adverse findings”.

Westpac has been accused of 23 million money-laundering breaches by watchdog AUSTRAC, some of which may have funded child exploitation in Southeast Asia.

Looking for a low-rate variable home loan? The table below displays a selection of variable-rate home loans on offer, featuring a low-rate pick from each of the following three categories: the big four banks, the top 10 customer-owned banks, and the larger non-banks.

Lender
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
FixedMore details
NO UPFRONT OR ONGOING FEES

Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years

NO UPFRONT OR ONGOING FEES
FixedMore details
  • Easy, digital application process
  • Market leading app to help you pay off your loan sooner
  • No on-going fees
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of January 18, 2022. View disclaimer.

Westpac’s chief executive officer Brian Hartzer will step down on December 2 in the wake of the scandal.

The government is expected to now choose between either Commonwealth Bank or ANZ to participate in the scheme, with a decision on the second major bank and approved non-major bank lenders expected to be made by the end of the year before the scheme kicks off on January 1 2020.

The big banks could only be entitled to receive up to half of the 10,000 guarantees allocated each financial year, while a range of non-major lenders will receive the other half.

Housing Minister Michael Sukkar said this is to keep the home loan space competitive.

“These rules are designed to ensure the Government’s expectation that smaller lenders play a significant role in the First Home Loan Deposit Scheme to boost competition is met,” Mr Sukkar said.

The scheme, one of Prime Minister Scott Morrison’s key pledges at the May 18 election, allows some first home buyers to secure a home loan with a 5% deposit and not have to pay for lenders mortgage insurance (LMI). The NHFIC would then guarantee the rest of what would normally be a 20% deposit.

Applicants will be subject to an income threshold of up to $125,000 for singles and a combined income of $200,000, provided both individuals are first home buyers.

Property price caps will also apply under the scheme to reflect the median house prices and stamp duty concessions in each of the states and territories.

Savings.com.au has reached out to Westpac and NHFIC for comment.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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