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What is an owner occupied home loan?
Generally, owner occupied home loans are for individuals purchasing a property with the intention of living in the property. Borrowers may also apply for an owner occupied home loan for holiday homes (that they do not rent out). However, this will vary from lender to lender and depend on a borrower’s individual circumstances.
How do owner occupied home loans work?
The home loan is secured using the purchased property and the borrower then repays the home loan amount, with interest, over the loan period. Home loan periods can vary, but are typically between 25 to 30 years.
The interest charge by the lender can be charged at a fixed rate or variable rate. A fixed rate home loan means that the interest rate is locked in for a period of time, usually 1 to 5 years, and will not change. A variable rate home loan means that the interest rate will fluctuate throughout the home loan term.
Features and benefits of owner occupied home loans
Depending on each individual agreement, owner occupied home loans can come with the following features and benefits:
- Offset accounts
- Redraw facilities
- Early and/or extra repayment options
If you’re unsure if any of these features and benefits are right for you, have a chat with our mortgage experts today. Our team will look at your current individual circumstances, as well as your financial goals for the future, to find the best solution for you.
What is the difference between an owner-occupied and investment loan?
Both an occupied home loan and an investment home loan refer to the amount of money you borrow from a lender to purchase a property. However, the difference lies in the purpose of the property you are purchasing.
While an owner occupied home loan is for borrowers who do intend to live in the property they’re purchasing, an investment home loan is for borrowers who do not intend to live in the property. Borrowers who purchase investment properties often do so in order to rent them out as a source of income.
Oceania Finance is here to help you reach your property goals
Applying for a home loan can be a stressful time. But with Oceania Finance, you don’t have to do it alone. Whether you’re looking to purchase your first home or thinking of acquiring an investment property, we’re here to help!
We offer flexible appointment times to suit any schedule, both in and outside of standard business hours. So if you’re ready to make the property leap or even just in need of some advice, contact us today to have a chat with one of our friendly experts today!
Owner Occupied Home Loan Frequently Asked Questions
If you haven’t used a finance broker before, you probably have some questions. Let’s help you get some answers.
Can you have 2 owner occupied loans?
Generally, an owner occupied home loan applies to the borrower’s primary residence and therefore an additional property will not be eligible for an owner occupied home loan.
If you currently have an owner occupied home loan, but are considering purchasing an additional home, it is likely the second home will be classed as an investment property, requiring an investment home loan.
If you’re looking to grow your property portfolio, talk to our mortgage experts at Oceania Finance. With access to a wide range of lenders, we’ll help you find the right solution for your needs. Contact us today.
Can I change my home loan from owner occupied to investment?
If you are wanting to change your current owner occupied home into an investment property, it’s best to speak with your lender or mortgage broker first. It’s likely you will need to refinance your home loan and will have new rates and terms.
Can you borrow more than the purchase price of a property?
Generally, lenders will not allow you to borrow more than the purchase price of the property. This is because lenders use the purchased property as security for the home loan.
Depending on the lender and your individual circumstances, it may be possible to borrow more than the purchase price of the property with a guarantor loan. However, it is best to speak with a mortgage broker if you are needing to borrow more than the purchase price of your property.
Our mortgage brokers have access to a wide range of lenders and are experienced in negotiating to get you the best terms for your individual needs. Contact us today to get started!
Are there owner-occupied home loan tax deductions?
While you may be eligible for tax deductions on an investment property, generally owner occupied properties are not eligible for any tax deductions. If your home is used to generate income in some way, like a home-based business, you may be eligible for certain tax deductions. However, it is best to speak directly with your accountant or the Australian Taxation Office when confirming eligible tax deductions.