BANK SLAMMED FOR KICKING TOWN IN THE GUTS
A MOVE by Westpac to force Port Douglas home buyers to stump up a 30 per cent loan deposit has been labelled a “kick in the guts” by a Far North mortgage broker.
The big bank has temporarily changed its lending criteria in what it says is a bid to reduce risk for new applicants in some areas and industries which have been heavily impacted by COVID-19.
Westpac has lowered the maximum loan-to-value ratio (LVR) for new applicants who live in areas highly reliant on tourism to support household income, meaning the bank will only lend up to 70 per cent.
Cairns Mortgage Brokers director and senior fellow of the Financial Institute of Australasia Roger Ward said the move was a “big kick in the guts” for Port Douglas and the Far North.
“This is a decision that is going to make it harder for the Far North’s road to recovery after COVID-19,” he said.
“It’s just really disappointing that they have such a flippant attitude to the livelihoods of account holders and consumers in Port Douglas.
“We need banks to be partners not just when the sun is shining but in the tough times as well.”
Mr Ward said his advice to Westpac clients would be to reconsider their relationship with the lender.
“Seek the advice of a mortgage broker and use a bank that will do lending in Port Douglas,” he said.
Small business owners in the region who already had a loan with Westpac would be less likely to be allowed to increase the size of their loan to make improvements to their business due to the change, he said.
A Westpac spokeswoman said the temporary adjustment to the lending criteria was made in reaction to Australia’s economic outlook due to COVID-19.
“These updates will help reduce risk for home loan applicants in some affected industries and areas, through measures such as lowering the maximum loan-to-value ratio (LVR),” she said.
“We expect these will be short-term adjustments and we will continue to review our credit lending policy inline with the changing economic environment.
“Westpac is committed to helping customers into home ownership and remains open to lend during this time.”