Investor vs owner-occupier home loan rates

The gap in RateSonar's data

RateSonar records the standard advertised variable rates from 133 lenders. As at 2 Nov 2026:

A worked example, using RateSonar's arithmetic. Take a $600,000 loan over 30 years. Moving from the middle owner-occupier rate to the middle investor rate adds about $24 to the monthly repayment. The rate is held constant over the loan, which real loans do not do.

You can see every investor loan on the investor home loan rate board, and the full list at home loan rates.

Why lenders price investor loans differently

Lenders set prices. RateSonar cannot tell you any one lender's reasons, and policies differ. What the official sources show:

• Regulation has targeted investor lending. APRA's page dated 19 December 2018 says its benchmarks on investor and interest-only lending "were always intended to be temporary" and describes the interest-only benchmark as put in place as a temporary measure in March 2017. A benchmark on investor loan growth sat alongside it.
• Pricing followed that regulation. In an RBA speech of 24 April 2018, Assistant Governor Christopher Kent said that after APRA's 2017 measures, banks raised rates, and that variable interest-only loan rates rose to about 40 basis points above equivalent principal and interest loans. The speech links the pricing gap to that tightening, not only to the borrower's risk.
• Interest-only is more common among investors. The same speech notes that interest-only loans maximise interest expenses, which are tax deductible for investors.

Those are history lessons, not a current rulebook. APRA announced the removal of the interest-only benchmark on 19 December 2018. Today's gap is whatever lenders choose to advertise, and RateSonar's table above is the current record.

Interest deductibility, in general terms

Moneysmart says you can offset most property expenses against rental income, including interest on a loan used to buy the property. It also notes you still pay the costs up front and should not rely on rent to cover the mortgage, because the property can sit empty. Moneysmart's investment property page also points readers to the ATO for the government's 2026 Budget announcement on negative gearing and capital gains tax, and does not describe the changes itself.

The ATO's general position, as shown in its rental guidance, is that the purpose of the borrowing decides whether the interest is deductible, not the property that secures the loan. A loan used partly for private spending has to be split. RateSonar could not load the ATO page itself on 2 November 2026, so confirm the wording at ato.gov.au or ask a registered tax agent. This is general information, not tax advice.

When the purpose of a loan changes

If you move out of your home and rent it, or the other way round, check your loan contract and talk to your lender. RateSonar found no official page that sets one rule for all lenders, so what applies to you, including any repricing, is in your own contract. Ask:

• Does my rate change if the purpose changes, and from what date?
• Do I need to notify you, and how?
• Are my current features (offset, redraw, discounts) kept?
• Would it be cheaper to refinance than to stay?

For the tax side, the purpose of each part of the borrowing matters. Keep records, and do not redraw from an investment loan for private spending without advice.

Mistakes and what to ask

• Comparing across categories. An investor rate beside an owner-occupier rate is not like for like. Filter first.
• Reading advertised rates as quotes. The rate you get depends on your lender's policy, your deposit and your loan. See what is LVR.
• Skipping serviceability. Lenders assess investor loans with their own rules on rental income. See how lenders assess serviceability.
• Ignoring the interest-only trade-off. Many investors choose it, but the rate is usually higher and repayments step up later. See interest-only home loans.