Investment Property vs Owner‑Occupier Loans

If you’re buying a property to rent out, you’ll need an investment loan. These loans differ from owner‑occupier loans in several ways:

Higher interest rates and larger deposits

Finder’s 2025 guide notes that investor loans typically have higher interest rates than owner‑occupier loans. For example, a $700,000 owner‑occupier loan at 5.39 % over 30 years results in monthly repayments of about $3,905, whereas an identical investment loan at 5.59 % costs around $4,015 a month and $39,457 more in total interest finder.com.au. Lenders often require lower loan‑to‑value ratios for investors (e.g. 80 % instead of 90 %), meaning you need a bigger deposit finder.com.au.

Stricter lending criteria

APRA and lenders historically imposed tougher rules on investors, such as considering only a portion of rental income and imposing interest‑only capsfinder.com.au. While restrictions have eased since 2019, you may still face more detailed affordability assessments.

Tax and features

Interest on investment loans may be tax‑deductible; speak to an accountant. Both owner‑occupier and investment loans can offer fixed or variable rates, offset accounts and redraws finder.com.au. Investors often choose interest‑only repayments for tax efficiency finder.com.au.

Broker advantage

A broker can compare investor‑friendly lenders, factor in rental income appropriately and ensure your loan structure maximises tax benefits. They’ll also advise if you should split your loan or use an offset account to keep deductible and non‑deductible debts separate.