Westpac makes it easier for brokers to back investors

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The bank’s policy changes, to deposit requirements and interest-only terms, are expanding options for brokers helping property investors achieve their long-term financial goals

WARREN BUFFETT famously said that “someone is sitting in the shade today because someone planted a tree a long time ago”. Westpac is tweaking its lending policy to make planting that tree just a little bit easier for property investors and the brokers who seek to help them. By lifting mortgage-insured investor lending to 95% LVR for principal and interest loans and extending investor interest-only terms from 10 to 15 years, Westpac is giving brokers more consistent policy settings and greater flexibility to help clients with strong incomes but smaller deposits or tighter cash flow, at a time when low rental vacancies and resilient investor demand are keeping property investment firmly in focus. “We’ve heard loud and clear from brokers that flexibility really matters for investor clients, especially when it comes to managing cash flow,” says Sarah Willsallen, Westpac’s head of Broker Distribution. Brokers are increasingly looking for structures that keep repayments manageable while investors add to their portfolios, and Westpac’s latest changes are designed to sit inside those conversations. “The lending landscape is always changing, and brokers play a vital role in helping customers work through that complexity,” says Willsallen. “A customer may only make a property purchase once or a few times in their life, but a busy broker supports multiple property purchases every single week.” That experience gap between occasional buyers and professional advisers has become more pronounced as lending requirements have tightened and documentation standards have increased.

Founded in 1817 as the Bank of New South Wales, Westpac adopted its current name in 1982. For over 200 years, we’ve been a key part of Australia’s economic and social fabric, supporting individuals, businesses and communities through innovation, financial services and a strong commitment to the nation’s progress.

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“The investor market has picked up over the past year, driven by very low rental vacancies, rising rents and renewed confidence”

Sarah Willsallen, Westpac

Investor lending moves to 95% LVR Westpac has increased its mortgage-insured investor lending to a 95% loan-to-value ratio for principal and interest loans across purchases, refinances and construction. The change addresses a common friction point for investors. “Being able to make a move sooner can make a real difference for customers as they build their financial future,” Willsallen explains. “By lifting our mortgage-insured investor lending to 95% LVR on principal and interest loans, we’re making it easier for brokers to help clients who have strong incomes but haven’t quite built up a large deposit yet.”

The policy applies uniformly across different home loan types, which reduces the number of exceptions brokers need to navigate when structuring deals. “Because this applies across purchases, eligible refinances and construction, it gives brokers more flexibility and fewer exceptions to work around,” Willsallen says. “It means more real-life scenarios fit our policy, which ultimately helps brokers get better outcomes for their clients.” The shift to 95% LVR for investors with mortgage insurance brings Westpac closer to settings offered by some competitors, though each lender maintains different qualifying criteria and assessment methods. Interest-only terms extended The bank’s extension of investor interest-only terms from 10 to 15 years is a change that emerged directly from broker feedback about cash flow management for investment properties. For new customers, the extended term provides additional runway during the early years of an investment when holding costs can stretch budgets. Eligible clients who are existing customers can extend their interest-only term without needing to submit a full reapplication. “It provides more breathing room in the early years of an investment and helps them better manage holding costs while working towards their longer-term goals,” Willsallen explains. The ability to extend without reapplying removes a source of friction for existing borrowers who would otherwise face the time and expense of a fresh application process. “For existing customers, it also reduces friction,” Willsallen says. “Eligible clients can extend their interest-only term without needing to fully reapply, which supports continuity and avoids unnecessary disruption.” The policy changes position Westpac more competitively against other lenders that have maintained longer interest-only periods as standard offerings. For brokers comparing products across multiple lenders, the 15-year term expands the scenarios in which Westpac becomes a viable option. “For brokers, this makes Westpac Group a stronger option for investor clients,” Willsallen says. “It’s a clear, built-in policy enhancement that supports more client scenarios and helps brokers confidently recommend Westpac in a competitive market.”

Market conditions supporting investors Extremely low rental vacancies and rising rents have boosted investor activity over the past year. Supply constraints still underpin investment demand, even as affordability challenges persist. “The investor market has picked up over the past year, driven by very low rental vacancies, rising rents and renewed confidence,” Willsallen says. “We’re seeing strong demand in a market where supply remains tight, which continues to support investor activity.” Population growth and a shortage of new housing ensure property investment remains relevant for many Australians building wealth over time. “While affordability and construction costs remain challenges, population growth and limited new housing supply mean property investment remains an important long-term consideration for many Australians,” Willsallen explains. These supply-demand imbalances show little sign of resolving quickly. With rental vacancy rates at historic lows in many capital cities, investors are finding tenant demand remains robust even as interest rates stay elevated. Borrowing capacity, the main hurdle The most significant obstacle for investors seeking finance today is borrowing capacity. “Higher interest rates and changes to how some income sources are treated mean approvals can be harder to achieve,” Willsallen says. Documentation requirements have also intensified, making things difficult for customers who may be unfamiliar with lending processes.

“There’s more emphasis on documentation and accuracy, which increases complexity for customers,” Willsallen explains. “That’s where brokers play such a critical role in helping investors understand their options and putting forward strong, well-prepared applications.” For many would-be investors, the combination of higher interest rates and tighter serviceability assessments means the deposit hurdle matters less than proving they can service the loan. This makes product features like extended interest-only terms particularly valuable, as they reduce required repayments.

“Today, brokers are true strategic partners. They bring clarity and confidence to what is in reality a massive learning curve for most people, and that’s incredibly valuable”

Looking ahead, Westpac economists are forecasting national dwelling price growth of around 5% in 2026, a moderation from the 8% gain recorded in 2025. While the prospect of one more rate hike from the RBA will present an added headwind, markets are expected to remain relatively resilient, supported by tight supply conditions. “We expect confidence to continue to improve, especially for investors taking a longer-term view,” Willsallen says. Her advice to property investors centres on maintaining perspective beyond immediate market fluctuations. With speculation about interest rate movements dominating financial media, she suggests investors focus on underlying supply and demand factors that drive long-term returns. “I’d encourage investors to stay focused on the long-term fundamentals and not get distracted by short-term noise,” Willsallen says.

Published 18 Mar 2026

Brokers as strategic partners The role of a mortgage broker has shifted from transactional facilitator to strategic adviser as lending environments have become more intricate. “Brokers have become trusted guides in an increasingly complex lending environment,” Willsallen says. “They’re helping investors understand policy changes, choose the right loan structures and work through processes more efficiently.” For most customers, property investment represents a substantial learning curve with significant financial consequences. Brokers bridge the knowledge gap between lenders and borrowers, translating policy settings into practical outcomes. “Today, brokers are true strategic partners,” Willsallen explains. “They bring clarity and confidence to what is in reality a massive learning curve for most people, and that’s incredibly valuable for customers making big financial decisions.” The broker channel has grown steadily as lending complexity has increased. Where customers once might have dealt directly with bank branches, many now recognise the value of working with someone who structures loans across multiple lenders every week and understands the nuances of each institution’s policies. Confidence holding despite rate environment Investor confidence has remained resilient even with interest rates recently increasing. The Westpac Economics team observes that housing prices and loan sizes have held up, supported by low unemployment, strong demand and limited supply. “Our Westpac Economics team is seeing investor confidence hold up well, even with interest rates still relatively elevated,” Willsallen says. “Housing prices and loan sizes have remained resilient, supported by low unemployment, strong demand and limited supply.”

Higher interest rates have pushed up funding costs, particularly for fixed-rate loans, influencing how some investors structure their borrowing. Brokers are helping clients adapt their strategies to current market conditions, weighing the security of fixed rates against the potential for variable rates to fall as the Reserve Bank of Australia shifts policy. “Higher interest rates are increasing funding costs, particularly for fixed rates, which has influenced how some investors are choosing to structure their loans,” Willsallen says. “That’s something brokers are helping clients manage every day.”

Sarah Willsallen, Westpac

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