Australian investors and owner occupiers can get the same interest rate deals
WHETHER you’re an owner-occupier or an investor, there’s no reason why Aussie home loan customers can’t snare the same rock-bottom deals.
Interest Rates
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MANY home loan customers are unaware that regardless of whether they are an owner-occupier or investor they can snare the same rock-bottom deals.
While many experts are tipping no cash rate cut on Melbourne Cup day, borrowers are being encouraged to hunt for record-low deals as rate offers on both fixed and variable rates continue to remain well below the four per cent mark.
Analysis by financial comparison website RateCity shows there are more than 20 lenders on the market that offer the same rates for owner occupiers and investors and many are smaller lenders including Newcastle Permanent.
But the differences in rate deals are at least two per cent — some offers start from 3.35 per cent and go as high as the mid-five per cent range.
Newcastle Permanent’s chief executive officer Terry Millett said they have many deals that don’t discriminate between different types of borrowers.
“We try not to use disincentives like charging one group more than the other,’’ he said.
“There are sometimes other restrictions such as the maximum loan-to-value ratio, for example at the moment our maximum LVRs for an investor is 80 per cent which means you must have a 20 per cent deposit whereas for our owner occupier it’s 95 per cent LVR.”
The lender offers investors the same interest rates for fixed rate home loans as they do for owner occupiers.
But Mr Millett urges consumers to use financial comparison sites to compare loan costs before signing up with any financial institution.
RateCity figures shows on a $300,000 30-year home loan the cheapest variable rate deal is 3.35 per cent and for a three-year fixed rate is 3.59 per cent.
For the same loan for an investor 3.69 per cent is the rate for both a variable and three-year fixed rate deal.
The cash rate rests at 1.5 per cent and many economists are predicting there will be more rate falls in 2017.
Home Loan Experts’s managing director Otto Dargan said he was seeing more lenders remove any differentiation between rates they offer owner occupiers or investors.
“Almost all lenders are closing the gap between their home loan and investment loan rates,’’ he said.
“Right now we’re seeing a couple of lenders offering the same fixed rates for homeowners and investors but in most cases lenders are charging a small premium for investment loans.”
sophie.elsworth@news.com.au
Originally published as Australian investors and owner occupiers can get the same interest rate deals
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