Big four bank Westpac offers a wide array of property investment loans. But how do they compare with other lenders’ products for investors?
How Do Westpac Investment Loans Compare?
- One of the top 10 lenders with the best serviceability (borrowing power) for investors
- Competitive interest rates for all products such as basic variable, package variable and fixed rate with pricing discounts available for package productseven for LVRs above 90%
- Good refinance cashback offers
- Fully assessed pre-approval
- Favourable debt-to-income (DTI) policy
- Accepts share and dividend income for serviceability
- Accepts inner city (high-density) properties as security for loans with up to 90% Loan-To-Value Ratio (LVR)
- Waived LMI available on 90% LVR investment loans for medical, accounting and legal professionals
- For medico loans, the most recent year’s documents are sufficient
- Delegated Underwriting Authority (DUA), which means a more flexible credit policy for investment loans with LMI
- No bank statements required if refinancing from a lender whose repayments history is evident that is reporting on Comprehensive Credit Reporting (CCR)
- Private banking is available for high-net-worth customers
- Long approval turnaround time
- Last two years’ financials required for LMI loans; does not accept low-doc loans
- Loans secured by mixed-use properties, serviced apartments and studio apartments are all restricted to 70% LVR or less
- Does not accept rental income from Airbnb properties
- Not great with the borrowing capacity if it’s the fixed rate product as they assess it based on revert rate which is much higher whereas most other lenders use the post fixed discounted variable rate which is lower than that of revert rate (this is the case with Owner Occupied as well)
What Are The Different Types Of Westpac Investment Loans?
Westpac has different home loan types that are suitable for different types of investors.
- 1. Westpac Flexi First Option Investment Property Loan: This is the bank’s basic home loan, with a low interest rate, minimal features, no fees for loan maintenance and no annual fees. Investors can choose a variable rate, fixed-rate or interest-only repayment type with this loan.
- 2. Westpac Rocket Investment Loan (Repay): This home loan comes with a discounted interest rate, optional offset account, unlimited extra repayments, split loan facility and redraw facility, with an annual package fee of $395.
- 3. Westpac Line Of Credit: A variable line of credit that gives investors easy access to the equity in their property for uses such as renovations, buying a new car, going on holiday, or a deposit for an investment property.
Westpac’s Premier Advantage Package offers interest-rate discounts and loan features such as unlimited offset, for an annual fee of $395.
Westpac Property Investment Loan – Client Story
Jim in Victoria
Refinance existing investment properties and cash out the maximum available equity to purchase a new investment property and do a cosmetic renovation on one property.
Jim owned six investment properties and the house where he lives.
Jim wanted to use some of the equity from his properties to buy another investment property and carry out renovations on one property.
When he approached his bank, they suggested that he cross-collateralise his properties. He wasn’t sure about this, so he reached out to us. As a savvy investor, he was seeking a second expert opinion.
Cross-collateralisation is where more than one property is used as security for a mortgage, as opposed to a standard home loan where you have one property securing one mortgage.
Under this structure, every property is linked and they are all treated as a single security. What this means is that if, later on, you want to refinance one of your properties for whatever reason, you’ll have to refinance the entire portfolio. Also, if you want to sell one of your properties, then you’ll first have to de-couple them. It’s usually better to avoid cross-collateralisation if you can.
Jim decided that the offer from his bank didn’t allow him to meet his objectives, which were to cash out the maximum available equity for renovations and a deposit on a new property. Jim also wanted a lower interest rate and more flexibility.
Home Loan Experts’ mortgage broker went to work. After clearly demonstrating that a cross-collateralized loan did not meet Jim’s objectives, we recommended he not go with one.
Instead, we structured each investment loan so that no single loan had an LVR exceeding 80%, so as to avoid LMI, while at the same time obtaining the maximum cashout possible. Ultimately, all properties were refinanced at a competitive interest rate while retaining high flexibility.
The best part was the fact that Jim received a total of $23,000 in cashbacks: $15,000 ($3,000 per property) in cashback came from Westpac for five properties; $4,000 from St George for one property; and $4,000 from RAMS for the last one.
Jim is now searching for an investment property to buy.
Compare Westpac Investment Loans To Other Lenders’
Not sure which lender is right for you? Our Home Loan Experts can help!
Talk to one of our award-winning mortgage brokers by calling us on 1300 889 743 or complete our free assessment form.