Westpac joins other big banks in cutting investor mortgage discounts

Westpac has lined up with the other big banks, withdrawing mortgage interest rate discounts for property investors.

Westpac sent a note to brokers advising them that package discounts would remain in place for owner-occupier mortgage customers but not for investors.

The change applies to all the group's brands, including Westpac, St George, Bank of Melbourne and BankSA.

Earlier this month Westpac reported that it had raised its loan serviceability hurdle, increasing the minimum assessment rate 30 basis points from 6.8 per cent to 7.1 per cent, as part of a move to tighten its mortgage underwriting.

ANZ made a similar move last week, when it contacted brokers advising them that they could offer investors advertised rates only, with no discretionary pricing.

However, discretionary pricing would continue to be available for existing ANZ owner-occupier customers applying for an investment loan.

Commonwealth Bank closed a A$1000 investment home loan rebate offer on May 15 and told brokers it was reducing pricing discounts for investment home loans.

CBA subsidiary Bankwest imposed a loan-to-valuation ratio cap of 80 per cent on investor mortgages.

Earlier this month National Australia Bank told brokers that from May 13 pricing below advertised rates would only be available for owner-occupier applicants and that investor loans would not be eligible for any pricing discretion.

Macquarie Bank is reported to have taken similar steps last week.

The Australian Prudential Regulation Authority wants lenders to limit the growth in their investor mortgage portfolios to an annual rate of ten per cent.

The latest APRA banking statistics show that ANZ's household investment book grew by 5.1 per cent over the six months to March, CBA's grew by 4.1 per cent, Macquarie's by 38 per cent, NAB's by seven per cent and Westpac's by 4.6 per cent.