Westpac has announced its decision to scrap SMSF loans, following a similar announcement last week that its subsidiary St.George would also exit this market
In an online update, Westpac has announced that effective 31 July 2018 its SMSF Investment Property Loan will be removed from sale.
Business lending to an SMSF for residential and commercial securities will also no longer be permitted, Westpac stated.
Westpac confirmed it will continue to service its customers with existing SMSF loans as allowable under the credit policy including split loans, switching loan products and extending loan maturity.
Effective Tuesday, 31 July 2018, the bank said it will no longer permit switching from principal and interest to interest only and extending an interest-only term.
Westpac also stated that under an internal pipeline policy, credit approval of in-flight deals as at Tuesday, 31 July 2018 will be allowed up to Tuesday, 30 October 2018 where signed customer application forms are held and dated prior to Tuesday, 31 July 2018 and customer sales conversation has been recorded in internal systems prior to Tuesday, 31 July 2018.
This latest move follows the announcement by its subsidiary St.George last week that it too will be withdrawing from sale its SMSF Home Loan product and Business Lending to SMSFs, effective Tuesday, 31 July 2018.
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