Investor home loan rates sliding, but gap to owner occupiers persists
With the dust well and truly settled in the wake of back-to-back RBA cuts, it’s now clear that Australians with owner-occupier home loans aren’t the only beneficiaries.
An analysis by Mozo has revealed that investors have also received partial rate cut relief, with the average principal and interest home loan rate in the Mozo database having dropped by 35 basis points since June 1.
Interest-only investor home loans have fared even better, with lenders having cut rates by an average 37 basis points since the start of June.
RELATED: Borrowers abandon Big 4 for challenger banks
On average, the drop means that an investor with a $300,000 loan (making principal and interest repayments over a 30 year term) will be $63 a month better off or $22,570 better off over the 30 year period.
“The RBA’s decision to cut 50 basis points off the official cash rate this year and the removal of the APRA cap on interest only loans has warmed up the paddles of life for property investors,” said Mozo Property Expert, Steve Jovcevski.
“It’s encouraging that as well as rate cuts for investors paying principal and interest, we’re seeing a downward movement on interest only loans. This time two years ago property investors were staring down average interest only rates of 5.12% and lenders were handcuffed around the volume of loans they could issue by the APRA cap.”
The recent rate cuts have also sharpened some of the lowest rates currently^ in the Mozo database, with investors able to take advantage of a handful of principal and interest offers of 3.40% and below.
Variable investor home loan rates of 3.40% and below^
| Lender | Home Loan | Payments | Rate |
|---|---|---|---|
| Reduce Home Loans | Investor Rate Slasher | Principal & interest | 3.19% (3.27% comparison rate*) |
| Well Home Loans | Well Balanced | Principal & interest | 3.27% (3.29% comparison rate*) |
| FreedomLend | Variable Home Loan | Principal & interest | 3.34% (3.34% comparison rate*) |
| Homestar | Variable Rate Loan | Principal & interest | 3.39% (3.44% comparison rate*) |
| State Custodians | Low Rate Home Loan with Offset | Principal & interest | 3.40% (3.41% comparison rate*) |
The investor rate gap
Despite the recent rate shifts, the gap between investor home loan rates and owner occupier home loan rates remains significant.
Following the RBA’s June and July cuts, the average owner occupier principal and interest home loan rate in the Mozo database currently^ sits at 3.99% (based on a $300,000 residential loan at 80% LVR) - a full 42 basis points below the average investor principal and interest home loan rate of 4.41%.
The gap is less pronounced for interest-only loans though, with the average rate in the Mozo database for owner-occupiers currently^ sitting at 4.51% compared to 4.69% for investors.
As the graph below shows, the difference in owner occupier and investor rates has ballooned significantly since APRA introduced an investor lending cap in February 2017.
“While this rate relief is welcome news for investors, compared to owner occupiers, they are still in the hurt locker. At a time when rental returns are under pressure, it’s still difficult to lay a solid foundation for investing in property,” Jovcevski said.
RELATED: First home buyer optimism at a peak: ‘perfect time’ to join the market
Looking to capitalise on the recent rate drop by refinancing or applying for a new investor loan?
Check out some of the hot investment home loans in the table below or make your way over to the Mozo home loan comparison tables to compare even more offers.
-
Promoted
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
- Investment
- LVR <80%
Go to site- Interest rate
-
6.29
%
p.a.
Variable
- Comparison rate
-
6.20
%
p.a.
- Initial monthly repayment
-
$3,092
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 online in minutes.
- interest rate
-
6.29% p.a. (6.20% p.a.*)
- Fixed loan revert rate
-
n/a
- Upfront fees
-
$0
- Ongoing fees
-
$0.00
- Discharge Fee
-
$0.00
- Package
-
-
- 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
- Extra repayments
-
yes - free
- Redraw facility
-
yes - free
- Minimum redraw amount
-
-
- Offset account
-
no
- Split account
-
no
- Other restrictions
-
-
- Other benefits
-
Rate discounted by 0.01% p.a. every year up to a maximum discount of 0.30% p.a..
- Special Offers
-
-
Read reviews and learn more about Unloan home loans
Go to site -
Promoted
Optimum Fixed Rate Home Loan
- Investment
- Principal & Interest
- LVR <80%
Go to site- Interest rate
-
5.89
%
p.a.
Fixed 1 year
- Comparison rate
-
6.66
%
p.a.
- Initial monthly repayment
-
$2,962
Lock in a competitive fixed interest rate and enjoy peace of mind for the fixed period with SWS Bank’s Optimum Fixed Rate Home Loan. There are no application, ongoing or banking fees to pay and first home buyers and refinancers can apply with a speedy online application. Get the flexibility of loan split options and redraw facility. No offset account available for fixed rate proportion of loan. Other fees may be applicable. T&Cs apply
- interest rate
-
1 year - 5.89% p.a. (6.79% p.a.*)
2 years - 5.69% p.a. (6.66% p.a.*)
3 years - 5.69% p.a. (6.55% p.a.*)
- Fixed loan revert rate
-
6.90% p.a.
- Upfront fees
-
$0
- Ongoing fees
-
$0.00
- Discharge Fee
-
-
- Package
-
-
- Maximum loan to value ratio
-
80.00%
- minimum borrowing amount
-
-
- maximum borrowing amount
-
$2,500,000
- type of mortgage
-
Fixed
- Repayment types
-
Principal & Interest
- Availability
-
Investor
- Repayment options
-
Weekly, Fortnightly, Monthly
- Extra repayments
-
yes - free up to $20,000 p.a. during fixed rate term
- Redraw facility
-
yes - free
- Minimum redraw amount
-
$1.00
- Offset account
-
no
- Split account
-
yes
- Other restrictions
-
Legal and exit fee at cost. Valuation fee charged at cost, starting from $132.
- Other benefits
-
-
- Special Offers
-
-
Read reviews and learn more about SWSbank home loans
Go to site -
Promoted
Fixed Home Loan
- LVR<90%
- Investment
- Principal & Interest
Go to site- Interest rate
-
5.84
%
p.a.
Fixed 2 years
- Comparison rate
-
6.47
%
p.a.
- Initial monthly repayment
-
$2,947
Enjoy the investor benefits of a fixed loan term for 3 years with IMB. Get up to $4,000 cashback (T&Cs apply). Up to 12 months repayments in advance without penalties. Free Internet and Mobile Banking redraws (T&Cs apply). Up to a 30 year loan term. Split loan available. No offset account.
- interest rate
-
1 year - 6.29% p.a. (6.58% p.a.*)
2 years - 5.84% p.a. (6.47% p.a.*)
3 years - 5.84% p.a. (6.42% p.a.*)
5 years - 5.99% p.a. (6.38% p.a.*)
- Fixed loan revert rate
-
6.54% p.a.
- Upfront fees
-
$799
- Ongoing fees
-
$6.00 monthly
- Discharge Fee
-
$350.00
- Package
-
-
- Maximum loan to value ratio
-
90.00%
- minimum borrowing amount
-
$10,000
- maximum borrowing amount
-
$5,000,000
- type of mortgage
-
Fixed
- Repayment types
-
Principal & Interest
- Availability
-
Investor
- Repayment options
-
Weekly, Fortnightly, Monthly
- Extra repayments
-
yes - free up to 1 year in advance
- Redraw facility
-
yes - free
- Minimum redraw amount
-
$500.00
- Offset account
-
no
- Split account
-
yes
- Other restrictions
-
Monthly fee only applies to fixed period of loan.
- Other benefits
-
-
- Special Offers
-
$4,000 cashback for loans $750,000 and above with a maximum LVR of 80%, settled within 90 days of application for refinancers or 180 for purchase loans. $3,000 for loans between $500k and $749k, $2,000 for loans between $250k and $499k.
Read reviews and learn more about IMB Bank home loans
Go to site
-
Optimum Fixed Rate Home Loan
- Investment
- Principal & Interest
- LVR <80%
Go to site- Interest rate
-
5.89
%
p.a.
Fixed 1 year
- Comparison rate
-
6.66
%
p.a.
- Initial monthly repayment
-
$2,962
Lock in a competitive fixed interest rate and enjoy peace of mind for the fixed period with SWS Bank’s Optimum Fixed Rate Home Loan. There are no application, ongoing or banking fees to pay and first home buyers and refinancers can apply with a speedy online application. Get the flexibility of loan split options and redraw facility. No offset account available for fixed rate proportion of loan. Other fees may be applicable. T&Cs apply
- interest rate
-
1 year - 5.89% p.a. (6.79% p.a.*)
2 years - 5.69% p.a. (6.66% p.a.*)
3 years - 5.69% p.a. (6.55% p.a.*)
- Fixed loan revert rate
-
6.90% p.a.
- Upfront fees
-
$0
- Ongoing fees
-
$0.00
- Discharge Fee
-
-
- Package
-
-
- Maximum loan to value ratio
-
80.00%
- minimum borrowing amount
-
-
- maximum borrowing amount
-
$2,500,000
- type of mortgage
-
Fixed
- Repayment types
-
Principal & Interest
- Availability
-
Investor
- Repayment options
-
Weekly, Fortnightly, Monthly
- Extra repayments
-
yes - free up to $20,000 p.a. during fixed rate term
- Redraw facility
-
yes - free
- Minimum redraw amount
-
$1.00
- Offset account
-
no
- Split account
-
yes
- Other restrictions
-
Legal and exit fee at cost. Valuation fee charged at cost, starting from $132.
- Other benefits
-
-
- Special Offers
-
-
Read reviews and learn more about SWSbank home loans
Go to site -
Fixed Home Loan
- LVR<90%
- Investment
- Principal & Interest
Go to site- Interest rate
-
5.84
%
p.a.
Fixed 2 years
- Comparison rate
-
6.47
%
p.a.
- Initial monthly repayment
-
$2,947
Enjoy the investor benefits of a fixed loan term for 3 years with IMB. Get up to $4,000 cashback (T&Cs apply). Up to 12 months repayments in advance without penalties. Free Internet and Mobile Banking redraws (T&Cs apply). Up to a 30 year loan term. Split loan available. No offset account.
- interest rate
-
1 year - 6.29% p.a. (6.58% p.a.*)
2 years - 5.84% p.a. (6.47% p.a.*)
3 years - 5.84% p.a. (6.42% p.a.*)
5 years - 5.99% p.a. (6.38% p.a.*)
- Fixed loan revert rate
-
6.54% p.a.
- Upfront fees
-
$799
- Ongoing fees
-
$6.00 monthly
- Discharge Fee
-
$350.00
- Package
-
-
- Maximum loan to value ratio
-
90.00%
- minimum borrowing amount
-
$10,000
- maximum borrowing amount
-
$5,000,000
- type of mortgage
-
Fixed
- Repayment types
-
Principal & Interest
- Availability
-
Investor
- Repayment options
-
Weekly, Fortnightly, Monthly
- Extra repayments
-
yes - free up to 1 year in advance
- Redraw facility
-
yes - free
- Minimum redraw amount
-
$500.00
- Offset account
-
no
- Split account
-
yes
- Other restrictions
-
Monthly fee only applies to fixed period of loan.
- Other benefits
-
-
- Special Offers
-
$4,000 cashback for loans $750,000 and above with a maximum LVR of 80%, settled within 90 days of application for refinancers or 180 for purchase loans. $3,000 for loans between $500k and $749k, $2,000 for loans between $250k and $499k.
Read reviews and learn more about IMB Bank home loans
Go to site -
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
- Investment
- LVR <80%
Go to site- Interest rate
-
6.29
%
p.a.
Variable
- Comparison rate
-
6.20
%
p.a.
- Initial monthly repayment
-
$3,092
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 online in minutes.
- interest rate
-
6.29% p.a. (6.20% p.a.*)
- Fixed loan revert rate
-
n/a
- Upfront fees
-
$0
- Ongoing fees
-
$0.00
- Discharge Fee
-
$0.00
- Package
-
-
- 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
- Extra repayments
-
yes - free
- Redraw facility
-
yes - free
- Minimum redraw amount
-
-
- Offset account
-
no
- Split account
-
no
- Other restrictions
-
-
- Other benefits
-
Rate discounted by 0.01% p.a. every year up to a maximum discount of 0.30% p.a..
- Special Offers
-
-
Read reviews and learn more about Unloan home loans
Go to site -
SMSF Home Loan
- LVR <70%
Go to site- Interest rate
-
6.99
%
p.a.
Variable
- Comparison rate
-
7.01
%
p.a.
- Initial monthly repayment
-
$3,323
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. (7.01% p.a.*)
- Fixed loan revert rate
-
n/a
- Upfront fees
-
$720
- Ongoing fees
-
$0.00
- Discharge Fee
-
$0.00
- Package
-
-
- 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
- Extra repayments
-
yes - free
- Redraw facility
-
no
- Minimum redraw amount
-
-
- Offset account
-
no
- Split account
-
no
- Other restrictions
-
$490 legal fee for purchase only. $300 discharge fee and $250 discharge documentation fee applicable if loan doesnt go to full term. Available for Self Managed Super Fund purposes only.
- Other benefits
-
-
- Special Offers
-
-
Read reviews and learn more about loans.com.au home loans
Go to site -
SMSF Home Loan
- LVR <80%
Go to site- Interest rate
-
7.49
%
p.a.
Variable
- Comparison rate
-
7.51
%
p.a.
- Initial monthly repayment
-
$3,493
Enjoy a competitive rate on your SMSF home loan with Loans.com.au. Available for purchase and refinance. No application fee and no settlement fee. No monthly, annual or ongoing fees. Unlimited extra repayments. Online access via Smart Money App. 20% deposit required.
- interest rate
-
7.49% p.a. (7.51% p.a.*)
- Fixed loan revert rate
-
n/a
- Upfront fees
-
$720
- Ongoing fees
-
$0.00
- Discharge Fee
-
$0.00
- Package
-
-
- Maximum loan to value ratio
-
80.00%
- minimum borrowing amount
-
$50,000
- maximum borrowing amount
-
$1,500,000
- type of mortgage
-
Variable
- Repayment types
-
Principal & Interest
- Availability
-
Investor
- Repayment options
-
Weekly, Fortnightly, Monthly
- Extra repayments
-
yes - free
- Redraw facility
-
no
- Minimum redraw amount
-
-
- Offset account
-
no
- Split account
-
no
- Other restrictions
-
$490 legal fee for purchase only. $300 discharge fee and $250 discharge documentation fee applicable if loan doesnt go to full term. Available for Self Managed Super Fund purposes only.
- Other benefits
-
-
- Special Offers
-
-
Read reviews and learn more about loans.com.au home loans
Go to site
Your selected home loans
^ Accurate as of time of writing.
*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.
* 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.
^See information about the Mozo Experts Choice Home Loan Awards
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.