Owner Occupied Int Rate Question

Hi All,

Can someone tell me whether is it the purpose of the loan (to buy either an owner occupied or IP) or is it the security that is used for the loan (main residence or inv property) that determines the interest rate charged? For example, I see owner occupied rates being advertised but I am unsure whether those rates apply to someone looking to buy an OO property or whether the rates apply because an OO property is being used as security for the loan (even if one was to use the loan to buy an IP). I always thought it was the former but some friends have told me that they have had their rates based on the latter.

TIA.

 

Interest Rate and product is determined by the purpose not the security.
Some lenders will allow you to have the same rate on the investment loan as the owner occupied loan however there are conditions to those kinds of products, such as; the properties need to be cross secured etc.

 

It is the use generally. If you were to use the money to improve the main residence it would generally be at main residence rates, but if the main residence is used as security and the borrowed money used for a deposit on an investment property it is generally investment rates.

 

Hi Terry, I also ask this because in one of the threads regarding the AMP Master Facility I believed an OO property was used as security even though some of the funds were used for investment purposes after splitting them from the Master Limit. So was just a little confused.

 

It is generally use only at the application stage. if you pay down an owner occ loan and reborrow for investment use you will get OO rates - unless you tell them.
AMP also allow OO rates on investments under certain circumstances.

 

Thanks Terry.

 

Westpac wont allow OO rate if the security is an IP regardless of loan purpose. Of course if its an OO property they will insist on Investment % rates if the purpose is investment. Hmm.

Eg
- borrow against IP for OO deposit get Inv rate.
- borrow against OO for Inv deposit get Inv rate.

 

Which lenders other than AMP allow this?