Westpac chief executive Brian Hartzer has forecast that the bank will not return to system growth in the Australian mortgage market, where it lagged badly in 2018/19, until the second half of the current financial year.The bank's Australian housing loans increased A$4.5 billion, or 1 per cent, in the year to September, with $60.6 billion of new lending offset by $56.1 billion of runoff. Owner occupied balances grew 3 per cent, while investor property lending fell 1 per cent.Housing credit growth in the September half was 0.6 times system.In the September quarter, runoff of $16.4 billion exceeded new flows of $13.6 billion.This compares with the bank's performance in the mortgage market in 2017/18, when net growth was $17.6 billion.Last year, in response to criticism by the Hayne royal commission, Westpac and the other banks reduced their reliance on the Household Expenditure Measure. The royal commission's position on HEM was that using it as the default measure of household expenditure did not constitute verification of a borrower's expenditure.Westpac expanded the number of expense categories in its home loan application from six to 13 and made some categories mandatory. Any category given a value of zero must be accompanied by an explanation A separate set of expense categories termed commitments (fixed outgoings) is also collected. Westpac chief executive Brian Hartzer conceded these changes made it "harder for brokers and customers to do business with us."It was not just the complexity of the changes; there were also problems with the introduction of the new processes."The tools we put out for brokers were clunky," he said.Hartzer said the problems have been fixed but the bank does not expect to get back to system growth in mortgages until some time in the second half of the current financial year."We expect system credit growth to be 3 per cent in housing," Hartzer said.He said processing problems were not the only reason the bank's home lending fell well below system. The bank was focusing on maintaining margin and not just volume growth.The composition of the Australian mortgage book at the end of September was 70 per cent principal and interest (compared with 61 per cent a year earlier), 27 per cent interest-only (compared with 35 per cent a year earlier) and 3 per cent line of credit.