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Westpac has informed brokers of key updates to its investor loan products, including changes to the interest-only term and a revised loan-to-value ratio (LVR).
In an email seen by Broker Daily, the major bank told brokers it is increasing the maximum interest-only term on eligible investor loans from 10 to 15 years for loans up to 80 per cent LVR.
The major bank told brokers that these changes will not apply to LMI waiver loans, bullet loans, National Rental Affordability Scheme (NRAS) transactions, or products with existing lower interest-only caps.
Westpac also informed brokers that it is increasing the maximum LVR on LMI Investor Loans (P&I) from 90 per cent to 95 per cent.
This change applies to new loans, increases, and top-ups, and there are no process changes required, as our systems have already been updated, according to the lender’s email.
The lender also told brokers that existing interest-only restrictions will continue to apply to loans originally written above 90 per cent LVR.
‘Game changer’
Speaking to Broker Daily, Eva Loisance, a mortgage broker at Finni, said a 95 per cent investment loan can be a game changer for investors because it significantly reduces the deposit, which is one of the biggest barriers to entering the market.
“For investors, being able to borrow up to 95 per cent means they can secure an investment property with significantly less upfront capital, allowing them to enter the market sooner or diversify faster,” she said.
“Instead of waiting years to save a 20 per cent or even 10 per cent deposit, they can leverage their position now and take advantage of growth, rental income, and compounding returns. It also keeps more of their cash available for buffers, renovations, or future purchases, which are key elements of a sustainable investment strategy.”
Loisance also said the tweaks would open the door to more opportunities for brokers.
“It expands the pool of clients who can transact, increases deal flow, and allows brokers to support investors who previously felt ‘priced out’. It also positions the broker as a strategic partner who can structure lending in a way that accelerates portfolio growth,” she said.
“Interest-only repayments for 15 years further strengthen cash flow. Investors keep their monthly commitments lower, align repayments with rental income, and preserve capital for higher‑yield uses such as debt recycling, offsets, or acquiring their next property.
“From the lender point of view, it is also a great way to retain clients who otherwise would refinance while their interest-only period ends.”
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