ING and Westpac’s regional banking arms have dished up more evidence of the vigilant lending mindset that has been reasserted in the housing finance market in recent months.
ING, which has a A$55 billion residential loan book, yesterday notified mortgage brokers that it will be withdrawing all cashback incentives to refinancing borrowers from 30 June.
The Dutch-owned subsidiary currently offers a $3000 cash incentive to home borrowers who switch their mortgage from another lender.
Eligibility for the incentive is restricted to borrowers looking to refinance a housing debt of more than $300,000 and whose loan to value ratio is below 80 per cent.
The withdrawal of the incentive could potentially unsettle ING’s volumes given that waiting times on loan pre-assessments and approvals have blown out in recent months.
According to disclosures made to brokers this week, ING is taking 13 business days to pre-approve new loan applicants and 6 business days to process refinancings.
These turnaround times compare unfavourably with most other lenders active in the broker market, including ANZ which says it is taking one business day to complete pre-assessments for new borrowers and Macquarie which claims it completes assessments within several hours.
While Westpac signalled in May that it planned to withdraw cashback offers for its house-branded mortgages, its regional banking arms confirmed only yesterday that they would be doing the same.
Mortgages marketed under the St George, Bank of Melbourne and Bank SA brands will phase out cashbacks to refinancing borrowers over the next three months.
Refinance applications submitted through these regional arms before 30 June and settled before the end of September will be eligible for a $4000 cashback, however those submitted up to the end of August will only be eligible for $2000.
In a notification sent to brokers Westpac’s regional subsidiaries also signalled new pricing measures aimed at shoring up their interest margins.
St George and the other Westpac subsidiaries yesterday began reducing promotional rate discounts offered to new borrowers who take up a basic variable loan.