First time buyers will have to stump up at least $37,500 as a deposit to get an average Aussie home loan from Westpac — or $12,500 more than before — under policy changes that came into force on the 19th January.

That means borrowers will have to come up with 87% instead of 92%. An average home loan of $250,000, new borrowers will need to have the much bigger deposit as well as be able to meet a monthly repayment of $1726 on a 25-year loan.

The only way potential borrowers can use the old loan-to-valuation ratio is to have a banking relationship with Westpac, even if it is a simple deposit account, and to have held it for at least six months. Existing borrowers will not have to comply with the changes.