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Owner home loan for investment property

Discussion in 'Property Finance' started by Yann, 12th Mar, 2016.

  1. Yann

    Yann Active Member

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    Hi

    I was told recently that as I rent my PPOR, I can classify one of my IP loan as a home owner loan, hence getting a better rate. Any opinion on this? Where to check?

    Yann
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Not legally. Check with the bank!
     
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  3. Tyler Durden

    Tyler Durden Well-Known Member

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    APRA warns banks over investor home loan switch

    As per Terry's comment, definitely not legal but it's happening A LOT. I've lost count of the number of people I've chatted with who have switched IP loans to owner occupier to try and beat rate rises. Some with encouragement from their brokerso_O
     
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  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Hi Yann

    I suppose it depends.

    if the bank told you that, and you can document it..................

    What lender are you with please ?

    Some lenders have diff policies depending on the security for the loans etc

    ta
    rolf
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    And I am not suggesting you not do it. Any penalties if caught would be unlikely.
     
  6. Bran

    Bran Well-Known Member

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    Wow! This seems so unlike you, you are our voice of most legal oriented reason!

    :)
     
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  7. Tyler Durden

    Tyler Durden Well-Known Member

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    For the individual I don't think there would any great penalty but if it continues en masse then APRA's hand will be forced, they've already fired the warning shot.
     
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  8. Yann

    Yann Active Member

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    Thanks all, it was from my broker and loan most likely with ANZ
     
  9. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    ANZ do not ask any questions at all...
     
  10. dabbler

    dabbler Well-Known Member

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    There has been talk recently of how the banks now have the IO lending under the required level, I was thinking, gee, they did that very quickly ? then I read the other day that APRA is about to crack it on a few banks, now I can see why.....
     
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  11. Frazz

    Frazz Well-Known Member

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    I've definitely heard of a few people following a route similar to this. Hmm!
     
  12. Eugene82

    Eugene82 Active Member

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    Yep I did it with ANZ. Just called them and said that I'm planning to live there. They changed it over the phone for me
     
  13. albanga

    albanga Well-Known Member

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    How could APRA seriously ever monitor this?
    Firstly when you purchase a property you have not yet acquired it so you cannot prove to the bank yet it will be your PPOR.
    This means the bank would have to contact all its customers post settlement and collect sufficient paperwork to prove they are infact living there (which could be as simple to get around as changing your mailing address).

    IMO It really is not worth there time to worry about this. Most people don't invest, most people that do invest are honest the few that are not will get away with it.
     
  14. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Ii'm in the opposite boat. For our new PPOR the banker said we needed to buy it using an IP loan as he told us servicing wouldn't pass if it was a PPOR. Once we sell the other properties our servicing would be fine and then we'll change it to a PPOR loan with minimal outstanding debt... (I suppose we could tell the bank now and knock off 27bp).... would they want to review our servicing though.... hmmm
     
  15. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    They can't. But they can push the banks to tighten up. Requiring borrowings to provide some evidence of actually living in the property would help (although it is easy to provide evidence you are living somewhere you are not).