What is so bad about Westpac

Discussion in 'Loans & Mortgage Brokers' started by Carol M, 10th Oct, 2019.

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  1. Carol M

    Carol M Well-Known Member

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    Hi,
    Had a broker say to avoid Westpac as their living expense calculator is pretty tough.
    We refinanced with them last year (August) and the question list was exhaustive, but I assumed most lenders would be as thorough these days?
    Am I missing something regards Westpac?
    Helping daughter to get a home loan, and as we use Westpac we considered them as their online borrowing capacity seems generous for low income wage earners. Also it may be handy if we decide to go family guarantee for her deposit.
    Thanks
     
  2. Morgs

    Morgs Well-Known Member Business Member

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    Horses for courses... it just depends on situation and objective as to if they're the best lender.

    If you're with Westpac and they go with Westpac for parental guarantor (which they do very well in my opinion) then the advantage is that they won't buffer the existing debt on the security property.
     
  3. wylie

    wylie Moderator Staff Member

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    I'd definitely look for an appropriate lender via a mortgage broker, and not directly with any bank. You could find your credit file takes a hit with each bank you approach, whereas with a broker, they won't create that problem.
     
  4. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Every lender is asking for a lot of detail on living expenses these days. I don't think Westpac's is any better or worse than others in this regard. There are lenders that don't require the same level of documentation though.

    Westpac's long term track record on rates isn't great in many categories either. They do have some good deals from time to time, but this isn't consistent.

    For basic scenarios there isn't a lot of difference in borrowing capacity from one lender to another. Some might view certain types of income slightly more favourably than others, but they're all using similar assessment rates. Living expenses can vary a little. It's not really possible to suggest which lender is going to be more generous without knowing the full details and checking the payslips of the individual borrower.

    Don't rely on the various online calculators to figure out borrowing capacity accurately. They're far to simplistic to be accurate.
     
  5. Redom

    Redom Mortgage Broker Business Member

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    Westpac are a bit brutal on the 'outside HEM' living expenses - particularly for investors.

    A month or two ago they changed their servicing calculator to strip out a lot of things from HEM, notably investment property expenses. If you have 5 properties, at $200 per month (minimum really, not strata), you've just added $1k in expenses to your servicing calc. Some of this is clawed back in their negative gearing add-back, but it is still a very big blow to servicing for them relative to the market. Others are moving in this vein too, but its not market wide yet so Westpac's calculator is one of the harder ones around for multi-investor/property owners at the moment.

    $2k rebates per property and a very good product suite overall though - so its not a bad lender if you can access it and it suits your requirements.
     
  6. thydzik

    thydzik Well-Known Member

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    A mate mentioned they now want to know your domestic and international holiday travel.
     
    Last edited: 14th Nov, 2019
  7. Lucki

    Lucki Well-Known Member

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    Haven't they reversed this now Redom?
     
  8. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Westpac still ask for holding costs for both investment and owner occupier property. I can't confirm, but I suspect this is in addition to the buffering of rental income that they apply. I also know know specifically how this affects their negative gearing calculations.
     
  9. sash

    sash Well-Known Member

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    Westpac are actually quite good....I use them as their loan portability product is excellent. If you are looking for the sharpest rates...the majors are not great.
     
  10. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    I've just realised why Westpac are so terrible.

    They're vampires.

    Think I'm kidding, it's all in their logo. It represents an open mouth with two vampiric teeth. It's red and bloody! It's been right in front of us all this time and nobody has realised it! I'll have to investigate the other banks and I'm now wondering if it's all an evil plot of undead monsters sent by Satan.

    PS. Of course I'm kidding, but I'm never going to be able to look at Westpac the same way... :p
     
    Archaon likes this.
  11. Lucki

    Lucki Well-Known Member

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    If Westpac ever see this, you are hired in their marketing team!
     
  12. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Rotate it 90degrees and its Dr Evils logo.
     
  13. Jam

    Jam Member

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    I went through a broker several months ago. There was a questionnaire about my living expenses, but it seemed completely perfunctory. I don't track most of my expenses, and I live in a city and with a lifestyle with totally different expense patterns to Australia anyway (sky high education fees, high property costs, and we don't own a car). The answers we filled in were all over the place, and largely guessed at. But I didn't get any further questions on expenses. This was with CBA.
     
  14. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Everyone should be asking you about your living expenses. This isn't optional, it's a regulatory requirement. The CBA categorises living expenses in a manner very similar to virtually every other residential lender. There's currently a push to standardise the categories.

    Just because you weren't asked, doesn't mean it wasn't done. The CBA also asks for transaction accounts (if they don't already have these themselves). These statements are used to analyse your spending patterns regardless of what you do or don't disclose.

    I do agree that most people's responses to this is fairly inaccurate. At this point I'm also collecting various statements and analysing the transactions simply because I want the application to align with what the bank will figure out on their own. It may all seem perfunctory to people, but this is very serious and it's better to be upfront about it. It's one of the biggest time consuming paperwork headaches in putting together a loan application these days.


    Keep in mind that asking you this question also serves a purpose. It makes you reflect on your own spending and budget in the context of the loan you're applying for. A lot of people simply assume they can afford the loan, I've done this myself. Making people do a budget hopefully ensures that a dose of reality is included in their thinking.
     
    Last edited: 14th Nov, 2019
  15. Lucki

    Lucki Well-Known Member

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    They take with both hands!!! And it is not fair. Do they want business or not?
     
  16. Jam

    Jam Member

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    Oh, I was asked. But as far as I could tell, it was just a tickbox because it was clear that my answers were semi-random guesses or just blank.
     

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