Buy IP using PPOR loan?

Hi all,

I'm looking to buy my first property this year, a unit in Sydney to use as a PPOR.

I've been reading the forum for a while, but haven't seen this topic come up:

The advertised interest rates on IP loans are higher than on PPOR loans, generally. So how to the banks ensure that punters don't buy property as a "PPOR" (using the lower rate loan) then rent it out as an IP?

Apart from the moral issues involved (and risk of committing fraud), it seems like a no-brainer for the investor.......


Thanks in advance.
 
Who is the lender? Rates are the same for PPOR as it is for Investment's, the loan is the same, its just the purpose that is different.

I think many years ago, the interest rates where higher for an investment loan, but not anymore, or at least with the lenders that I deal with.

Regards,
 
Hi Evachange,

Yes sorry, I just checked Cannex and you're right - no difference in % for anything. That'll teach me to try thinking on a Sunday.........
 
80s, I left School in 89.

I remember while working for Westpac looking up old records for Term Deposits and the bank was paying 16% -17% and remember thinking that was not bad.

I have a lot of older friends that purchased their PPOR when Interest rates were something like 22%
 
I've been reading quite a few books about the Aussie property market in the 70s-80s lately, so the idea there was a difference must have just lodged in my head!
 
How times have changed.

I worked with a guy at Westpac who was from South Africa and he was paying 24%, different country and situation I know, but ouch!
 
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