Refinancing applications for existing property loans with other lenders often fail to include explanations for late fees or other apparent lending problems, such as payment default interest, it claims.

Westpac announced in April it was ceasing lending to all foreign residential property buyers.

All lenders are nervous about the quality of tranches of overseas loans, particularly from mainland China, after widespread fraudulent applications were detected.

Other lenders have tightened lending to varying degrees.

Commonwealth Bank of Australia will not lend where 100 per cent of income is foreign and the borrower is self-employed. It has a maximum 70 per cent loan-to-value ratio for temporary visa-holders earning Australian income.

Australia and New Zealand Banking Group will not lend where 100 per cent of income is foreign. It imposes a 70 per cent loan-to-value ratio if more than half of the applicant's income is foreign.

Under tough new Westpac guidelines, the previous rule that Australian permanent or temporary visas with a minimum of 12 months remaining on the visa are eligible will "only apply in certain circumstances". The criteria was not available.

It is also tightening rules on which migrants are eligible for low-documentation loans, which are aimed at those who cannot provide the usual required paperwork such as tax returns and financial statements when applying.


Local borrowers will also have to provide better evidence of their ability to meet repayments.

For example, hand-written receipts from builders used as evidence of deposits or payments for construction of a dwelling will not be acceptable.

Other big four banks, including ANZ and CBA, are also tightening their lending both to multimillion-dollar residential borrowers and the mass market.

Earlier this week Westpac attempted to allay market fears with claims that surging population growth will absorb any short-term oversupply, and that long-term demand will sustain frenetic central business district and inner-suburban apartment building.

Other lenders, such as Bankwest, are snubbing Melbourne and Brisbane by imposing bigger deposits on borrowers than for apartments in Sydney and Perth.