Commonwealth Bank-owned Bankwest is further tightening the screws on property investors, no longer taking into account negative gearing tax breaks in new loan applications.
After a recent surge in property investor lending at CBA, Bankwest told mortgage brokers that from Monday, the calculators it used to assess customers for loans would not include the tax benefit investors receive if their property is loss-making.
More World News Videos
- Video duration
- 03:04
'Same problems as London': Morrison ...
'Same problems as London': Morrison doubles down on negative gearing
High property prices in the UK show that Australia's housing affordability crisis is not related to negative gearing, Treasurer Scott Morrison told business leaders in Marylebone, in the UK.
Up Next
Islamic State call for the death of three Australians
- Video duration
- 00:50
- Video duration
- 00:50
Islamic State call for the death of three ...
Islamic State call for the death of three Australians
Three Australian Muslim leaders have been named in a global list of people that Islamic State believe deserve to die for speaking against extremist ideology.
Up Next
US dam risk triggers urgent evacuation
- Video duration
- 00:53
- Video duration
- 00:53
US dam risk triggers urgent evacuation
US dam risk triggers urgent evacuation
Residents below the tallest dam in the United States, near Oroville in Northern California, were urgently ordered to evacuate on Sunday after a spillway appeared for a time to be in danger of imminent collapse.
Up Next
Calls for dolphin plane transportation ban
- Video duration
- 00:22
- Video duration
- 00:22
Calls for dolphin plane transportation ban
Calls for dolphin plane transportation ban
Animal welfare activists call for a ban on transporting dolphins by plane after video shows them being boxed into crates for a travelling circus in Indonesia.
Up Next
Evacuations ordered near California dam
- Video duration
- 00:43
- Video duration
- 00:43
Evacuations ordered near California dam
Evacuations ordered near California dam
US officials order residents near one of the nation's biggest dams to evacuate after an emergency spillway severely eroded.
Up Next
Meryl Streep slams Trump again
- Video duration
- 01:27
- Video duration
- 01:27
Meryl Streep slams Trump again
Meryl Streep slams Trump again
In a surprise twist, award-winning actress tells the Human Rights Campaign gala dinner she agrees with a Donald Trump tweet.
Up Next
Hole in tallest US dam grows
- Video duration
- 00:53
- Video duration
- 00:53
Hole in tallest US dam grows
Hole in tallest US dam grows
A nine metre hole has appeared in a section of northern California's Lake Oroville Dam which is expected to worsen.
Up Next
WWII bomb forces Greek city evacuation
- Video duration
- 01:13
- Video duration
- 01:13
WWII bomb forces Greek city evacuation
WWII bomb forces Greek city evacuation
Thousands of residents are evacuated from the Greek port city of Thessaloniki in order for the military to defuse a World War Two bomb weighing 250 kilograms.
'Same problems as London': Morrison doubles down on negative gearing
High property prices in the UK show that Australia's housing affordability crisis is not related to negative gearing, Treasurer Scott Morrison told business leaders in Marylebone, in the UK.
After CBA and Bankwest last week froze new refinancing loans for property investor customers from other banks, the move will limit how much credit the bank can extend to customers with negatively geared properties.
It is a further attempt to slow down growth in investor loans to comply with the regulator's 10 per cent a year speed limit.
Related Content
The change will not affect customers of CBA, which is tipped to deliver a $4.84 billion half-year profit at its results on Wednesday. CBA did not comment.
A Bankwest spokesman said the change was in line with guidance from regulators, and it would being the lender into line with "industry best practice".
Changes such as these have become more common in the past two years, with banks often tweaking their lending policies and rules on minimum deposits in order to comply with rules introduced to cool investor lending.
Banks have a 10 per cent speed limit on how quickly they can expand in the property investor mortgage market, under a policy introduced by the Australian Prudential Regulation Authority (APRA) in late 2014.
It is not the first time banks have targeted negative gearing tax breaks as one way of putting on the brakes, and potentially lowering the risk in their property investor portfolios.
Westpac, the country's biggest lender to property investors, in 2015 said it would not include the tax benefits of negative gearing when assessing customers for new loans, before unwinding the change last year.