The biggest portfolio holder for investment lending in Australia, Westpac and affiliate Bank of Melbourne has announced an 80% LVR cap on all investment properties effective immediately.

Internal communications received earlier this month by Westpac clearly illustrated that Investment loans originated as either loan packages "Rocket Investment Loan" or "Premier Advantage loan" will be the key assessment indicator to determine if the loan will be primarily used for investment or owner occupied purposes.

There is some confusion circulating both owner occupied and investment lending under cross colorisation arrangements whether this 80% cap applies to both properties is yet to be confirmed.
To our knowledge these changes are due to recent recommendations applied by APRA who are the regulators of the Banking Industry, we will most likely see other lenders in due course follow this road to tighter lending practices.