To the annals of human achievement in speed – like breaking the sound barrier in 1947 and running the mile in four minutes in 1952 – we can now add Westpac, the bank that says it won mortgage approval in 10 minutes.
While this may not warrant a Guinness World Records entry, in Australian banking Westpac is clearly looking for a medal for its achievement. That said, judges may be called upon to rule on this claim, as the big four banks have announced that they are working on similar “fast-track” digital mortgages with slightly varying technology features, marketed through different channels and available for different groups of borrowers.
Westpac is supposed to be ahead of the pack because it better measures how long it takes an applicant to get approved, ahead of Commonwealth Bank’s 10-minute application, which measures how long it takes to do request rather than seeking approval.
ANZ also announced that it had a 10-minute mortgage in the pipeline, but did not name a time when it might hit the market. Meanwhile, National Australia Bank delivers on its “under an hour” promise, which is slightly less than instant gratification.
Bragging rights aside, Westpac won’t be offering its super-fast new product to everyone when it launches at the end of this calendar year.
The first set of requests will have to come from individual customers refinancing loans. They will need to be salaried or wage earners, have 20% equity in their property, and owner occupiers – in other words, vanilla, simple, low-risk borrowers. The plan is to roll it out more widely next year.
In banking circles, the time it takes to approve loans (traditionally the manual variety) is called “yes time” and it’s a hotly contested area. If the banks are to be believed, the speed of processing mortgages has tipped the balance of market share as significantly as competition in mortgage interest rates.
(That’s partly because banks don’t like to advertise that they’re discounting rates for market share.)