Westpac raises deposits for first home loans

Westpac will require first-home buyers to pay at least $37,500 as a deposit for an average home loan under new lending policy changes.

The new deposit level amounts to a $12,500 rise, the Australian reported.

Westpac has told its managers and mortgage loan brokers that new customers will not secure a loan unless they can meet a loan-to-value ratio of 87 per cent, instead of the former 92 per cent.

The newspaper calculated that for an average home loan of $250,000, new borrowers will have to provide the much bigger deposit as well as be able to meet a monthly repayment of $1,726 on a 25-year loan.

Last month, Westpac raised its variable home loan rate to the highest level among the major banks. The raising of the first home deposit level may encourage Australians to compare home loans as house prices also increase.

Australian Bureau of Statistics data released last week showed a 5.6 per cent fall in the number of home loans issued across the country in November.

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