In one small leap for banks and one giant leap for prospective home owners, the big four bank has announced a plan to approve home loans in as little as 10 minutes.
The system, which launches in the final quarter of 2022, will be made available for select customers who apply for Westpac’s basic Flexi First Option mortgage, with plans to roll the process out to more customers come next year.
The major bank is not the first to offer such swift application approvals, with lenders such as Tic Toc and Nano offering similar market-shaking processes and approval times, while other larger bank rivals such as NAB have begun exploring their own streamlined application offering.
NAB detailed that 35 per cent of eligible branch customers are unconditionally approved within an hour, with a further 50 per cent approved within a day.
The Commonwealth Bank Australia (CBA) has also matched these innovative approaches, launching its own new digital platform “Unloan” in May, which also boasts a 10-minute application process; however, this service is only available to refinancers.
RateCity research director Sally Tindall said the push to speed up loan approval times through digitalisation is part of competition for new business she has described as “the digital arms race”.
She outlined how the big winners from this battle between the big four are not the banks themselves, but rather the borrowers.
“For decades, the big banks have held on to cumbersome legacy systems and lengthy application processes at the frustration of customers. That’s all changing thanks to the entrance of a handful of tech-savvy lenders, which have challenged the status quo,” she said.
Ms Tindall said smaller lenders, such as Tic Toc, have been leading the charge in the tech-driven mortgage space, and this push towards digitalisation has been propelled further by the presence of other tech-centric lenders, such as Nano.
She said that the start of the COVID pandemic brought the big banks’ processing times under fire, as the rush of new lending and refinancing emphasised their sluggish approval times. Now, Ms Tindall believes the big four are fighting fire with fire.
“They’re investing in new digital platforms and spring cleaning their backend systems to deliver faster, less stressful experiences for customers.
“Westpac might be a bit late to the part, but the bank has shown it plans to be a serious contender in the digital home loan space. A 10-minute home loan process is a sought-after service for customers looking for certainty in a property market that’s changing by the day,” she explained.
She expressed her belief that the quickened system will not just be attractive to new borrowers but also to those who have placed their refinance on hold due to the complications that surround the process.
“It’s worth noting many fast-tracked home loans are only for select borrowers. If your borrowing needs are ever so slightly out of the box, you might find you’re not eligible for one of these lightning-fast mortgages,” she concluded.