Major lenders Westpac and Macquarie are the earliest big banks to react to the federal budget’s decision to end negative gearing on existing homes. Their response lands quickly, with investor borrowing rules already shifting even before many brokers see formal policy documents.
Capital Brief confirms Macquarie has instructed its lenders to stop counting negative gearing benefits when assessing new loans for existing property purchases. That instruction aligns directly with the federal government’s new policy settings.
Macquarie frames the move as a compliance step under responsible lending obligations rather than an optional tightening of credit. By stripping out future tax losses from loan assessments, the bank is testing whether investors can service debt without relying on tax offsets.
The change is aimed squarely at new investor loans secured against existing properties, the segment most exposed to the budget decision. Other large banks now look likely to follow given Macquarie’s and Westpac’s early positioning.
Macquarie also indicates the updated rules are designed to protect investors from overextending as the negative gearing changes take effect. Loan serviceability tests now focus more heavily on rental income and borrowers’ underlying cash flow, not tax-driven strategies.
Investor advocates suggest the shift could curb aggressive leverage in established housing even as new builds retain more favourable treatment under the budget framework. Lenders and investors alike now need to recalibrate models that, until recently, assumed negative gearing as a standard feature of property investment.
