Westpac Bank and all banks in the Westpac group which include St George Bank, Bank of Melbourne and Bank SA have ceased lending to all foreign property buyers.
The group will no longer accept mortgage applications from non-residents, temporary visa holders or home-buyers with foreign self-employed income in Australia. The new policy came into effect on April 26th.
"In line with Westpac Group's responsible lending practices, we have strengthened our policies regarding non-residents lending and foreign income, which represent a very small component of our loan book," a Westpac spokesman told AFR.
This will not apply to previously approved mortgages but will apply to all loans that were pre-approved but have not been issued yet, AFR reported.
Local applications that include foreign income will be given a lower loan-to-value ratio of 70 per cent, down from 80 per cent.
Earlier ANZ and CBA, the nation’s biggest home lender, have either refused applications with 100 per cent foreign income or withdrew loans to temporary Australian residents with foreign current income.
The developers have warned that the announcement is likely to negatively impact the large volume of new apartment settlements coming up in major Australian capital cities.
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