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Last Article Uploaded: Sunday, December 17th, 8:42PM
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Westpac ups rental income allowance

Changes to Westpac’s qualifying income assessments mean that investors will now be able to claim 80% of their rental income as part of their income calculation.

Monday, December 4th 2017, 6:15AM

by Miriam Bell

A Westpac spokesperson says that their servicing assessment policies are periodically reviewed and adjusted.

One of the bank’s recent adjustments included moving the rental income allowance to 80%, up from 75%, he says.

“The most recent changes are intended to streamline the assessment process, rather than increase the available level of debt.”

Westpac’s move is the first loosening of credit that has been seen for quite some time.

Mortgage Supply Company director David Windler says that any movement in credit requirements that takes into consideration more income is a good thing.

It is just a small shift and one which is likely to benefit bigger rental property portfolio holders the most, but it is nice to see a credit policy move in the right direction, he says.

“For some borrowers it could make the difference between a loan approval and a loan decline.”

Windler says the move puts Westpac out on their own as the only lender offering more than what has become the standard level of 75% for rental income.

There hasn’t been much loosening of credit requirements over the last 12 months, rather there has been a slow strangling of the ability to borrow, he says.

“That means Westpac’s move is good news for investors and, for mortgage advisers, it is nice to have a shift in a positive direction for a change because most policy changes have been restrictive and unhelpful to borrowers.”

While the move is welcome, the situation remains very different to that of 10 years ago when many banks had a rental income allowance of up to 95%, he adds.

Tags: Lending Mortgage Supply mortgages Westpac

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Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.95 5.15 5.49
ANZ Special - 4.45 4.65 4.99
ASB Bank 5.80 4.79 4.99 5.29
ASB Bank Special - 4.49 4.59 4.89
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.59 4.65 4.99
BNZ - Std, FlyBuys 5.90 4.99 5.29 5.59
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.45 5.50 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 5.00 5.20 -
Housing NZ Corp 5.79 4.75 4.99 5.29
HSBC Premier 5.79 4.19 4.29 4.89
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.95 5.15 5.49
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.45 4.65 4.99
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special 5.00 - 4.75 -
SBS Bank 5.89 4.99 5.19 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.59 4.69 4.99
Sovereign 5.90 4.79 4.99 5.29
Sovereign Special - 4.49 4.59 4.89
The Co-operative Bank - Owner Occ 5.75 4.49 4.69 4.99
The Co-operative Bank - Standard 5.75 4.99 5.19 5.49
TSB Bank 5.80 4.80 5.15 5.45
TSB Special - 4.55 4.69 4.79
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.99 5.19 5.44
Westpac - Offset 5.95 - - -
Westpac Special - 4.59 4.65 4.94
Median 5.82 4.79 4.99 5.29

Last updated: 8 December 2017 7:30am

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