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This is down from the previous minimum of 10 per cent.
The major bank said that the change means more clients may be able to enter the investment market, as lower upfront capital is required.
At the same time, interest-only (IO) terms have been extended, with eligible borrowers now able to access IO periods of up to 15 years, up from the previous 10-year limit.
The longer IO term provides additional repayment flexibility, which may support longer-term investment strategies for some clients.
The offering applies to both new and existing investment property loans. Loan-to-value ratios (LVRs) of up to 95 per cent are available for principal and interest repayments with LMI, while the 15-year IO term is available for loans up to 80 per cent LVR.
‘Opens up doors’
Eva Loisance, mortgage broker and principal at Finni, said that the changes are reflective of Westpac’s confidence in the investor market.
“You’ve got concerns around the economy, yet lenders are still looking at the investment market. If they’re lending at 95 per cent, they’re clearly making a call on the security of those loans and feel the market has strong fundamentals,” she said.
“At the end of the day, if you can service the loan, you can service the loan – so it does open up some doors.”
Loisance added that the 95 per cent product would only fit specialist situations, as most investors she works with borrow with a lower LVR.
“I feel like around 90 per cent is sort of where majority land. Ninety-five per cent of your real aggressive ones that just want the property because they see the value in it, and I guess this now opens up another door for them,” she said.
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