Does a 3-year lending high signal the return of property investors?
For the past year attention has largely been focused on the owner occupier segment of the Australian property market - particularly on first time buyers who have proved particularly enthusiastic about entering the market.
New lending data released by the Australian Bureau of Statistics last week points to a steady re-emergence of investors though, with seasonally-adjusted investment loan commitments hitting $6.9 billion in February.
This is the highest level of new investor borrowing since February 2018 and it marks a 70% increase compared to May last year when loan commitments were at their lowest.
However, the ABS lending figures show that investors are still being dwarfed by owner occupiers when it comes to borrowing, as owner occupiers took out $21.7 billion of the $28.6 billion worth of new loan commitments made in February.
And Dr Andrew Wilson, Chief Economist at property technology company Archistar, says that the current share of investor borrowing still remains well below peak levels.
“Despite recent growth, investor lending remains subdued, accounting for just 20.25% of total home lending and remarkably still below the 20.4% market share for first home buyers,” he said.
“The average long-term residential loan market share for investors is 33.3% with the February total still 31.0% lower than the record $10.1 billion approved over April 2015 during similar strong market conditions.”
The state of investor rates
According to Dr Wilson, finance constraints are among the ‘significant barriers’ holding back investor activity at present, with one such restraint being the interest rate premium paid by investors compared to owner occupiers.
So how do home loan interest rates for investors compare?
Here are the average variable rates^ for different borrower types in the Mozo database as of April 8, 2021.
Owner occupier | Investor | Difference | |
Principal and interest repayments | 3.30% | 3.69% | 39 basis points |
Interest only repayments | 3.80% | 3.92% | 12 basis points |
While these differences may look relatively small, over the long run even a minor variation in rates could have a significant impact on the total amount paid by a borrower.
For instance, using our home loan repayments calculator shows that on a mortgage of $400,000 being paid off over 25 years, the difference between a rate of 3.30% and 3.69% equates to $25,091 in extra interest.
However, it’s worth noting that - as the table below shows - the ‘rate premium’ paid by investors narrows when the lowest variable rates^ in the Mozo database for different borrower types are compared.
Owner occupier | Investor | Difference | |
Principal and interest repayments | 1.99% (2.05% comparison rate*) - Reduce Home Loans Super Saver Variable | 2.24% (2.30% comparison rate*) - Well Home Loans Well Balanced | 25 basis points |
Interest only repayments | 2.47% (2.47% comparison rate*) - FreedomLend Variable Home Loan | 2.49% (2.55% comparison rate*) - Well Home Loans Well Balanced | 2 basis points |
RELATED: Hobart and Sydney markets lead the way as property values climb higher in March
Ready to make an investment move of your own? You’ll want to find a home loan to suit your needs, so get started by checking out some of the hot offers below, or head on over to our home loan comparison tables to browse even more offers from a greater range of lenders.
^Variable interest rates are based on a loan size of $400,000 and a standard loan-to-value ratio (LVR) of 80%, accurate as of April 8, 2021.
Compare investment home loans - last updated 19 March 2024
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Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Investment, Refinance Only
interest rate
comparison rate
Initial monthly repayment6.29% p.a. variable6.20% p.a.For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
CompareCompareUnloan Variable
For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
- interest rate
- 6.29% p.a. variable
- comparison rate
- 6.20% p.a.
- variable rate
- 6.29% p.a.
- comparison rate
- 6.20% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Investor
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Unloan Variable
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Straight Up
Obliterate, Investor, Principal & Interest, <50% LVR
interest rate
comparison rate
Initial monthly repayment6.34% p.a. variable6.34% p.a.Investors get a low variable rate depending on your deposit with Athena’s Straight Up Investor Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.
CompareCompareStraight Up
Investors get a low variable rate depending on your deposit with Athena’s Straight Up Investor Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.
- interest rate
- 6.34% p.a. variable
- comparison rate
- 6.34% p.a.
- variable rate
- 6.34% p.a.
- comparison rate
- 6.34% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 50.00%
- minimum borrowing amount
- $100,000
- maximum borrowing amount
- $2,500,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Investor
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Athena Straight Up
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Star Blue - SMSF Refinance Special
Principal and Interest, LVR<70%
interest rate
comparison rate
Initial monthly repayment6.99% p.a. variable7.05% p.a.Grow your property portfolio with Homestar’s SMSF Home Loan. Offset account included. No liquidity or net asset position requirements. No ongoing fees. Minimum set-up costs. Fast application process with a dedicated home loan specialist.
CompareCompareStar Blue - SMSF Refinance Special
Grow your property portfolio with Homestar’s SMSF Home Loan. Offset account included. No liquidity or net asset position requirements. No ongoing fees. Minimum set-up costs. Fast application process with a dedicated home loan specialist.
- interest rate
- 6.99% p.a. variable
- comparison rate
- 7.05% p.a.
- variable rate
- 6.99% p.a.
- comparison rate
- 7.05% p.a.
- Upfront fees
- $839
- Ongoing fees
- $0.00
- Discharge Fee
- $2,200.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 70.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $1,500,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Investor
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Homestar Star Blue - SMSF Refinance Special
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Back to Basics Special
LVR<60%, Investment, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.43% p.a. variable6.44% p.a.Competitive variable for investors with no monthly account keeping or ongoing annual fees. Unlimited additional repayments & option to redraw additional repayments as cashback.
CompareCompareBack to Basics Special
Competitive variable for investors with no monthly account keeping or ongoing annual fees. Unlimited additional repayments & option to redraw additional repayments as cashback.
- interest rate
- 6.43% p.a. variable
- comparison rate
- 6.44% p.a.
- variable rate
- 6.43% p.a.
- comparison rate
- 6.44% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $350.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- -
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Investor
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- $0 establishment fee on lending >$150,000
Read our Mozo Review to learn more about the Suncorp Back to Basics Special
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Fixed Home loan
50%-60% LVR, Investment, Interest Only
interest rate
comparison rate
Initial monthly repayment6.54% p.a.
fixed 3 years6.24% p.a.Competitive rate tiers for investors only. Leverage the equity you have built up for a lower interest rate. Enjoy a super-fast application process. Split up to 10 loans against your property. Optional offset accounts. Unlimited fee-free transactions. Interest only option.
CompareCompareFixed Home loan
Competitive rate tiers for investors only. Leverage the equity you have built up for a lower interest rate. Enjoy a super-fast application process. Split up to 10 loans against your property. Optional offset accounts. Unlimited fee-free transactions. Interest only option.
- interest rate
- 6.54% p.a.
fixed 3 years
- comparison rate
- 6.24% p.a.
- variable rate
- p.a.
- comparison rate
- 6.24% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - up to 5% of outstanding loan balance per year
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $100,000
- maximum borrowing amount
- $2,500,000
- type of mortgage
- Fixed
- Repayment types
- Interest Only
- Availability
- Investor
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Athena Fixed Home loan
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SMSF Home Loan
LVR <70%
interest rate
comparison rate
Initial monthly repayment6.99% p.a. variable7.00% p.a.Enjoy a competitive rate on your SMSF home loan with Loans.com.au. Available for refinancers only. No application fee and no settlement fee. No monthly, annual or ongoing fees. Unlimited extra repayments. Online access via Smart Money App. 30% deposit required.
CompareCompareSMSF Home Loan
Enjoy a competitive rate on your SMSF home loan with Loans.com.au. Available for refinancers only. No application fee and no settlement fee. No monthly, annual or ongoing fees. Unlimited extra repayments. Online access via Smart Money App. 30% deposit required.
- interest rate
- 6.99% p.a. variable
- comparison rate
- 7.00% p.a.
- variable rate
- 6.99% p.a.
- comparison rate
- 7.00% p.a.
- Upfront fees
- $720
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- no
- Offset account
- no
- Maximum loan to value ratio
- 70.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Investor
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the loans.com.au SMSF Home Loan
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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.
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