Penalties if you say your investment property is your home?

Theoretical questions only!
2 scenarios:
1) You buy a house to live in, and you get a home loan with a fixed rate for 3yrs, and this is your main residence, but after 2 years you move out and then use it as an investment property. Are you still ok to keep the fixed rate at the same level for the 3rd year, or do you need to tell the mortgage company of the change in situation? Are there any penalties if you don't?

2) As above. You had a home loan on a property that was your main residence with a fixed rate for 3 years, but after 2 years you move out and it becomes an investment property. You do not report the change to the bank. Then the fixed rate period finishes and you are due to renew your rates. The property is solely an investment property now, but you renew as if it were still your main home (you take the homeowners fixed rate offer from the bank rather than the investment property fixed rate). If this were to result in no financial benefit to you (as the rates were in fact almost identical) can you get in trouble for this? What penalties could you incurr?
Thanks for reading.

 

read your contract. It will all depend on the terms you agreed to. With many of the newer contracts you are agreeing to notify the lender if you rent the house out.

 

Thanks Terry.