Trickle starts swapping from investor to home loan to lower interest rates

Trickle starts swapping from investor to home loan to lower interest rates
Trickle starts swapping from investor to home loan to lower interest rates

Banks customers are changing their investor home loan to an owner-occupied loan, after recent interest rate rises.

Many borrowers have been living in properties that they previously rented to tenants.

Their bank had not been aware they are now owner-occupiers.

For the first time since the late 1990s, banks are now charging housing investors higher interest rates than owner-occupiers, part of their response to APRA's concerns to quell the housing market overheating.

Westpac and ANZ Bank say a growing number of these borrowers are now contacting them to prove they are in fact owner-occupiers.

Westpac confirmed to Fairfax Media customers had contacted it to change their loan classification from housing investor to owner-occupied since it announced it would raise interest rates for investors by 0.27 percentage points in July. 

ANZ Bank also confirmed the trend.

National Australia Bank has not had the same trend, as its rate rise was for interest-only customers rather than investors. 

But an NAB spokesman confirmed some customers had switched into principal and interest loans. 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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