What is an owner occupier home loan?
It is a type of mortgage specifically designed for individuals who intend to live in the property they are purchasing.
How do owner occupier home loans work?
Generally, owner-occupier home loans offer lower interest rates compared to investment property loans. This is because lenders perceive owner-occupied properties as lower risk due to the borrower's commitment to reside in the property.
The amount you can borrow depends on factors such as your income, credit history, and the property's value. Owner-occupier home loans usually offer flexible repayment terms, including options for principal and interest repayments or interest-only periods.
Some loans offer offset accounts, where your savings can offset the interest charged on your loan, potentially reducing interest costs. Banks can allow you to withdraw any additional repayments you have made on your loan if needed.
Lenders consider factors such as your income, employment stability, credit history, and the property's value and location when assessing your eligibility for an owner-occupier home loan.
Home loan calculations for 20 years (example)
| Amount, $ | Rate, % | Accrued %, $ |
| 100,000 | 5.60% | 56,467 |
| 100,000 | 5.70% | 57,475 |
| 100,000 | 5.80% | 58,483 |
| 150,000 | 5.90% | 89,238 |
| 150,000 | 6.00% | 90,750 |
| 150,000 | 6.10% | 92,263 |
| 200,000 | 6.20% | 125,033 |
| 200,000 | 6.30% | 127,050 |
| 200,000 | 6.40% | 129,067 |
| 250,000 | 6.50% | 163,854 |
| 250,000 | 6.60% | 166,375 |
| 250,000 | 6.70% | 168,896 |
Who offers the best owner occupier home loans?
It can depend on the interest rates, fees, features, loan terms, and your individual financial situation. Here are some lenders known for competitive owner-occupier home loans in Australia:
Big Four Banks:
- Commonwealth Bank
- Westpac
- ANZ
- National Australia Bank (NAB)
- Other Major Banks:
- HSBC
- Macquarie Bank
- Bank of Melbourne
- BankSA
- George Bank
- Smaller Banks and Non-Bank Lenders:
- ING
- Suncorp
- ME Bank
- UBank
- AMP Bank
- Bendigo Bank
- Australian Unity
How do I compare owner occupier home loans?
First you should research the interest rates offered by different lenders. Fixed and variable rate options are available, each with its advantages and considerations regarding repayment stability or flexibility. Assess upfront and ongoing fees associated with the loan, including application fees, valuation fees, annual fees, and discharge fees.
Determine whether the lender offers loan terms that align with your financial goals and budget. Consider features such as offset accounts, redraw facilities, flexible repayment options (e.g., interest-only periods), and the ability to make additional repayments without penalties.
It can depend on the interest rates, fees, features, loan terms, and your individual financial situation.
