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What's the difference between owner occupier and investment home loans?

A young couple with a child stand beside a real estate agent inside a property they are viewing.

Most people looking to buy property will encounter two types of home loans: owner-occupier and investment property loans. 

As you might be able to tell from the clues in their names, one is a live-in home loan (owner-occupier) and the other is suited for those who will be renting their property out (investment loan). 

But aside from that distinction, what are the real differences between the two?

What is an owner occupied home loan?

Owner-occupied home loans (sometimes called a live-in home loan) are for those looking to purchase a home they intend to live in. They sit at the other end of the spectrum from investment property home loans.

If you're intending to purchase a house to live in, then owner-occupier home loans allow you to borrow the money you need. You’ll then need to repay the loan over a set period of time, in instalments known as ‘repayments’. 

Home loan repayments are calculated based on interest rates. Unless you secure a fixed rate of interest, if a lender’s rate goes up then your repayments will rise too. So, make sure you keep on top of the latest home loan interest rates.

Owner-occupied home loans are best suited to those who are looking to purchase a home to live in, but are also available to those who want to purchase a holiday house (as long as it won’t be rented out), and to those who are purchasing land to build their home on.

Key features of owner-occupied home loans

Owner-occupied home loans may come with features such as:

What is an investment property loan?

Investment property home loans are for those who do not intend to live in their property. Rather, this type of home loan is most often used by those who want to rent it out as a source of income.

Like owner occupied home loans, you will need to pay back the money you borrowed, plus interest. 

The interest rates for investor home loans are often charged at a higher rate than owner-occupier loans, due to property investors being perceived as higher risk. 

When searching for an investment home loan, or if you’re considering refinancing, make sure you compare the latest rates to find one that works for you and your property.

Key features of investment loans

When looking for an investment home loan, keep an eye out for features like:

  • Interest-only loans
  • Repayment holiday options 
  • Offset accounts
  • Low fees 
  • A line of credit facility
  • Option to revalue your property (increase your equity).

Can you switch from an owner-occupied to an investment property loan?

Yes, you can turn your home loan into an investment loan if you’re intending to rent it out. 

You will need to notify your lender of the change and switch your loan product to an investment property loan. 

This may change the interest rate you are charged to a higher rate, but if you’ve been with the lender a while you may be able to negotiate for a better deal, or even compare investment loan rates to see if you can refinance your home loan when you switch. 

If you switch your loan from owner occupier to investor, you may lose the features associated with your home loan, like offset accounts and redraw facilities. But, there may be new features available to you as an investment property owner.

Home loan comparisons on Mozo - last updated 28 May 2024

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  • Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    6.25% p.a.
    fixed 3 years
    6.20% p.a.

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

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  • Discount Variable Home Loan

    Owner Occupier, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a. variable
    6.01% p.a.

    A low rate home loan for owner-occupiers packed with great features including unlimited extra repayments, free online redraw, no application or monthly admin fees. Rate will vary depending on LVR. Winner of a Mozo Experts Choice 2024 Low Cost Home Loan Award^

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  • Discounted Home Value Loan

    Owner Occupier, Principal & Interest, LVR 70-80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.09% p.a. variable
    6.09% p.a.

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).

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  • Fixed Rate

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.54% p.a.
    fixed 2 years
    7.10% p.a.

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

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  • Basic Home Loan

    Owner Occupier, LVR<60%, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.16% p.a.

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

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  • Mortgage Simplifier

    LVR<80%, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.17% p.a.

    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.

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  • Offset Home Loan

    Package, Owner Occupier, LVR<60%, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.39% p.a.

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

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    Details
  • Variable Home Loan 90

    Principal and Interest, LVR <90%

    interest rate
    comparison rate
    Initial monthly repayment
    6.04% p.a. variable
    6.06% p.a.

    Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required.

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    Details
Jack Dona
Jack Dona
RG146
Money writer

Jack is RG146 Generic Knowledge certified, with a Bachelor of Communications in Creative Writing from UTS, and uses his creative flair to cut through the financial jargon and make home loans, insurance and banking interesting. His reader-first approach to creating content and his passion for financial literacy means he always looks for innovative ways to explain personal finance. Jack's research and explanations have been featured in government publications, and his work is regularly featured alongside major publications in Google's Top Stories for Insurance.