Westpac Home Loans

Westpac Home Loan Review

Getting approved for a home loan with Westpac

Identity documents

As with any lender, you’ll need to verify to Westpac you are who you say you are. To be eligible for a home loan with Westpac, you’ll have to be the following:

• At least 18 years old

• An Australian citizen or permanent resident

• Employed or self employed

You’ll need to provide two of the below identity documents

• Australian drivers licence

• Medicare card

• Passport

• Australian Birth certificate

Proof of income

You’ll also need to demonstrate that you’ll be able to make your repayments. Westpac will assess your income and expenses (using the Household Expenditure Method) to see if you have enough spare money each month to make repayments. If you’re an employee, you’ll just have to offer up some recent payslips.

For self employed borrowers, the process can be a bit more difficult. Westpac has stopped offering special low doc home loans, so self employed borrowers will usually have to provide information about their business finances, which could include tax returns or bank statements. However, some self employed borrowers qualify for Fast Track assessment, which means the loan can be approved without this.

To qualify for Fast Track Assessment, you’ll need:

• To provide your last two years of personal ATO notices of assessment

• Have been self employed for at least two years

• Have a deposit 20% or more

• Not rely on other other source of income other than those in the notice of assessment

Responsible lending at Westpac

Like every Australian lender, Westpac has several procedures to ensure it is writing loans for borrowers who will be able to repay them

Serviceability

As an Australian Authorised Deposit-taking Institution (ADI), Westpac are required to comply with APRA’s guidelines and assess home loan applications using a 3% serviceability buffer, so a borrower with a 6% rate needs to demonstrate the ability to repay the same loan at 9%. In 2023, Westpac announced it would be relaxing this requirement for certain refinancing customers with excellent credit, but in general, customers will need to factor in the buffer.

Westpac also has a floor rate of 5.05%, which means it takes the higher of the serviceability adjusted rate, or 5.05%, and assesses the loan against that.

Debt to income requirements

Westpac also has a maximum debt to income threshold of 7. Any borrower who is taking on a loan that means their outstanding debts will be more than 7 times greater than annual income will automatically have their application referred to the Westpac credit department, which could slow down approval time.

Westpac approval times

According to the website, Westpac is able to grant conditional approval within 1 business day. Applications can be completed online in 10-20 minutes.

InfoChoice contacted Westpac for more accurate average approval times, but has not received a response.

Green home loans

In April 2023, Westpac announced it was launching a Green Home Loan, with a discounted rate for eligible customers building more energy efficient homes.

CEO Peter King said this was an example of the bank's commitment to supporting customers meeting sustainability goals.

“We want to encourage customers looking to build a new home to consider more energy efficient designs which could help reduce their emissions and power bills,” he said.

Already on offer is the Greater Choices Home Loan, with interest free finance up to $50,000 for customers installing any of the following in their homes:

• Heat pumps (including hot water heat pumps)

• Eligible wood burners

• Insulation

• Double glazing 

• Ventilation

• Solar power systems and batteries

• Rain water tanks

These loans also do not have any establishment fees.

Bridging home loans

Westpac also offers bridging home loans to help customers in the transition from one property to the next.

These loans are essentially short term finance that is to make up for the short fall if someone buys their new home before selling their old one. During the bridging period, which can be up to 12 months, you might be paying off two loans simultaneously.

Home loan porting

Another option Westpac offers is home loan porting, where an existing Westpac mortgage on one property can be transferred to another. The property under security changes to the new one, and the existing loan balance, interest rate and features like offset accounts or redraws transfer over. For borrowers already with Westpac who are buying a new property, porting loans can be a good way to save on time and some of the usual stresses of moving to a new home.