Westpac announces lending restrictions for foreign buyers

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A third Australian bank has announced changes to its lending practices in response to the Australian Prudential Regulation Authority’s (APRA) push to reign in the levels of finance being supplied to investors.

APRA last week told banks they had to hold more capital against their mortgages as part of their efforts to bring annual growth of investor lending to under 10% and the Commonwealth Bank and ANZ both announced rate increases as a result.

Those moves have been followed by Westpac attempting to curtail lending to foreign investors by writing to mortgage brokers to tell them that all applicants must have an Australian visa and confirm to Foreign Investment Review Board (FIRB) requirements.

The bank issued the advice in a letter to brokers last week that was leaked to the Australian Financial Review.

“All future home lending applications that you submit to Westpac must contain a primary application that has an Australian residential address," the letter read.

According to the AFR, the letter was sent to brokers identified as having a high proportion of clients who do not reside in Australia.

In a statement to the AFR, a Westpac spokesperson said the bank was reminding brokers to operate within the FIRB rules.

"It's just a reminder to brokers with a higher percentage of non-resident lending that when submitting owner-occupied applications [they] should contain an Australian residential address."

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