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To the annals of human achievements when it comes to speed – like breaking the sound barrier in 1947 and running the four-minute mile in 1952 – we can now add Westpac, the bank that says it has conquered the 10-minute mortgage approval.
While it may not warrant an entry into the Guinness World Records, in the sphere of Australian banking Westpac is clearly looking for a medal for its accomplishment. That said, there could be a call for the judges to adjudicate on this claim because all four of the big banks have announced they are working on similar “fast-tracked” digital mortgages with slightly varied technology features, marketed through different channels and available to different borrowing groups.
Westpac is purportedly leading the pack because it measures best on the time for an applicant to get approval, ahead of the Commonwealth Bank’s 10-minute claim, which measures how long it takes to make the application rather than getting approval.
In the race to yes - Westpac has nosed ahead
ANZ has also announced it has a 10-minute mortgage in the pipeline but hasn’t nominated a time on when it might hit the market. Meanwhile, National Australia Bank is sticking by its “less than an hour” promise, which falls marginally shy of instant gratification.
Bragging rights aside, Westpac won’t be offering its new hyper-speed product to everyone when it launches at the end of this calendar year.
The first crop of applications will need to be from individual customers who are refinancing loans. They will need to be wage or salary earners, have 20 per cent equity in their property and owner occupiers – in other words the vanilla, uncomplicated and low-risk borrowers. The plan is to roll it out more widely next year.
Westpac CEO Peter King during an update briefing in Barangaroo, Sydney.Credit: Dominic Lorrimer
In banking circles the time taken to approve loans (traditionally the manual variety) is referred to as “time to yes” and it’s a hotly contested area. If the banks are to be believed, the speed of processing mortgages has tipped the scales in market share as significantly as competition in mortgage interest rates.
(This is in part because banks don’t like to advertise that they are discounting rates for market share.)