Lending Update: Changes to our home loan policy in relation to borrowers with offshore income

Good Morning,

Today we are making changes to our home loan policy with respect to borrowers who are based overseas or earn overseas income.  Included below is a summary of the changes and why we have made this change.

Summary of the policy changes

Effective today, Thursday 9 June:
Westpac will no longer lend to non-resident borrowers with overseas income
The maximum allowable LVR for NZ citizens and permanent residents with overseas income is 70% (from 85%)
Borrowers on temporary resident visas will only be accepted if they have both a New Zealand address and NZ based income.
I have an application in progress for a borrower who no longer qualifies or who has an approval for a higher LVR than the revised policy what do I do?
If your application has been approved by Westpac, you may proceed
However if your application has been conditionally approved ‘subject to finding a suitable property’ then that conditional approval can remain in place until the offer expires. If the borrower wishes to amend or extend that approval then you may find that the amended application is declined.
All other applications, i.e. that are not yet approved, may need to be amended or withdrawn.

What is the difference between a migrant customer and an offshore borrower?

A migrant customer may be a temporary resident visa holder, however their intention is to buy property in New Zealand, they are already working in New Zealand, and eventually gain permanent residency. The customers continue to qualify at a lower LVR.

An offshore borrower earning overseas income intends to purchase in New Zealand for investment or temporary purposes, they may live in New Zealand or offshore. These customers no longer qualify.

Are ex-pat New Zealanders living overseas included in these changes?

New Zealand residents and permanent residents who currently live overseas and earn offshore income (not self-employed or business income) are able to borrow however the maximum allowable LVR has been reduced from 85% to 70%.

An updated Lending Guide will be distributed over the coming days which will cover off full details of these changes, including additional criteria that may apply to your customer.

Why we have made this change:
These changes have been made in order to reflect our continued obligations for responsible lending along with a recent review of our home loan policies in relation to lending and foreign income.
In a fast moving market, it is important that we remain committed to building a strong home lending portfolio comprising customers who we have a deep and long term banking relationship with.

We understand these changes will have an impact to you and your clients, as always please continue to talk to your Business Development Manager in the first instance if you have any queries regarding this change.


Rachael Lelean





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