A glitch in Westpac’s manual processing system has turned into a costly mistake – leaving them with the task of paying back over 40,000 homeowners.
The processing error left the affected homeowners on interest-only loans after the term expired, when they should have been switched to principal and interest. This means that, while you were left on interest-only repayments, you weren’t able to make a dent in your mortgage principal – while paying excess interest.
Will Ranken, Westpac’s general manager (home ownership), said the bank “conducted a full review of the matter” after the issue was identified over 2 years ago.
If you are wondering if this has affected you, the error has predominantly impacted loans with an interest-only period which expired between 2009 and 2016.
About 70 percent of the affected homeowners have been reimbursed, but if you have not yet received a direct payment into your home loan account or a cheque, and this has significantly affected your financial situation – you may be due additional compensation. You may also be able to apply for an extension on your loan.
Erin Turner, spokeswoman for Choice said, “People who have chosen an interest-only loan can often find themselves in a tough position, especially if the property they’ve purchased hasn’t increased in value.”
While there is a dedicated hotline you can call to find out if you were affected (1300 132 925), there is no firm date by which you can expect a refund.
If you are worried about the situation this error has created for you and want to find out if you are entitled to compensation, talk to our team at Paramount Law for a free case assessment.