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Another major bank changes loan conditions

By Reporter 15 July 2019 | 1 minute read

In response to new guidance from the banking regulator, another one of the big four banks has adjusted its loan serviceability terms. 

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Australian lenders assess loan serviceability based on whether a prospective borrower would be able to meet repayments up to a certain interest rate, which is higher than what the current market dictates.

Westpac has now moved its current interest rate floor to 5.75 per cent, down from 7.25 per cent. It has also increased its buffer from 2.25 per cent to 2.5 per cent.

This follows moves from ANZ on Friday last week, which was the first of the big four banks to adjust its criteria. ANZ changed its interest rate floor to 5.5 per cent from 7.25 per cent.

These moves from the lenders follow guidelines adjustments from APRA, the banking regulator. APRA previously set interest rate floors and is now permitting the lenders to self-assess.


These changes to loan serviceability guidelines, combined with APRA lifting its restrictions on interest-only lending earlier this year, should make finance easier to access for Australian investors than it has been in previous years.

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Another major bank changes loan conditions
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