Westpac has announced it will allow customers to change the conditions of their mortgage repayments without a serviceability assessment.
The major bank has implemented new measures to give customers more flexibility with their home loan repayments during the COVID-19 pandemic.
The measures will allow eligible home loan customers to switch from principal and interest repayments to interest-only, or extend their current interest-only home loan term for a further 12 months without a serviceability assessment.
Will Ranken, Westpac General Manager, Home Loans, said the changes had been introduced in response to continued demand for support with mortgage repayments.
"We recognise that many customers who have been financially impacted by COVID19 still want the option of making some repayments during this time," Mr Ranken said.
“These changes mean it is now simpler for customers to apply to extend their interest only loan term, or switch their repayments to interest only."
Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.
Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 14 July 2020. View disclaimer.
More than 115,000 Westpac customers have deferred their mortgage repayments as part of the bank's COVID-19 home loan support.
The major bank has also created a home loan repayment deferral calculator to help customers understand the potential impact of deferring their mortgage repayments.
The move by Westpac comes after several major banks cut rates on investment interest only loans over the last few weeks.
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
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.
In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*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.
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