Advisers say the bank is, in most cases, unprepared to go beyond 70% LVR for investors, out of step with its big four rivals, who have begun to lend to investors at higher LVR terms.
Brokers told TMM Online the situation was a source of frustration for clients that had long-standing relationships with the big four bank.
"It's a really unusual situation for Westpac to make that decision," said one Auckland broker. "They're usually one of the first banks to make changes, but they're not budging on it. It's unusual that one of the mainstream banks would take this course of action."
The adviser reported confusion among Westpac staff, "who don't know why they have taken that approach".
Another broker added: "There may be a couple of reasons for this. They could be focused on lower risk owner-occupier properties, or rebalancing the book, with a lower capital requirement for owner-occupier properties."
The Reserve Bank scrapped LVR restrictions for investors and owner-occupiers in May, ending the rules for one year to free up the market in the wake of Covid-19.
A Westpac spokesman said the bank would continue to review loans case-by-case.
"We have made no recent changes to our lending policy for property investors. We continue to approve applications on a case by case basis, including some above 70% LVR.
"We regularly review and update our lending policies to help us better serve our customers."