Westpac begins factoring climate risk into consumer lending in New Zealand

Westpac is now publicly factoring in climate hazard risks, such as flooding and erosion, when making lending decisions for homebuyers in New Zealand. The bank will share risk information about individual properties with prospective buyers to aid their decisions. While existing mortgages are unaffected and lending will not be declined solely due to risk, the head of consumer lending stated that the risk could affect the amount or term of a mortgage in no more than two percent of cases.

Westpac is the first bank in New Zealand to publicly incorporate increasing climate risk into its lending practices. This shift changes how property risk is assessed in consumer lending and contrasts with practices of some insurers, such as AA Insurance, which paused new policies in the Westport region due to extreme flood risk.