Easier to get a loan as an IP or PPOR?

Is there any difference, making it easier to get finance for a property purchase with whether your going to use the house as an investment property or owner occupier?

My wife and I both earn relatively good money (combined 95k per annum gross).

We are looking to buy a property which has a purchase price of $290k. We have a 5% Deposit (14.5k) and want finance of 275.5k (95%).

We have just scraped enough $ together to afford the deposit, but we aren't anywhere near buying because according to my calculations the purchasing costs are nearly as much as the deposit (correct me if im wrong)
LMI approx $6000 (2.3%?)
Legals approx $1100
Build/Pest insp $600
Stamp Duty $2900 (if living in within first 12 months qld consession)
Contingency $1000
Total -> $11,600 (nearly as much as the deposit).

Do we just keep saving this extra 11.6k and postpone buying, to save that extra will take us at least 9 months. Is there any way we can get the loan as an investment property so the bank would see it as earning money and then kick the tenants out and move in, or are there any lenders doing higher LVRs than 95% or allowing you to capitalise LMI? We have an impeccable credit rating.

Just before the GFC collapse we were very close to getting a Stg no deposit loan but just missed out (we only had enough $ saved for purchase costs), we have good income to service a loan just struggling to save because our rent is very expensive and the property prices in south east qld keep going up.

we are looking at the beenleigh / eagleby / etc area as an entry level in to SE QLD market..figuring we can make it an IP later on and move closer to the gold coast, neither of us are eligible for FHOG either. i think the area is going to get good capital growth.

Does anyone have any suggestions on how we can get over the line? Sorry for the long post.
Is this your first property (for both of you)? If so, are you eligible for the first home owners grant and stamp duty exemption?


Hi Jason
Unfortunately not, we did previously own a property a few years ago which we sold as we relocated from down south to move to QLD. Unfortunately the profits from that property (~20k) were eaten up by various fees/relocation costs... & now we aren't eligible for any of this boosted FHOG or anything anymore.

Just to clarify - the properties you owned - where these bought after 1st July 2000. Did either of you get the FHOG when you got them, or live in them? Or were they just IP.

There is a little known clause that you may still be eligible for the FHOG even if you have owned a IP as long as it was purchased after 1st July 2000, it was never lived in and the FHOG was not used.

Just checking :)


Yep, definitely not eligible..wish we were though. we bought in 07 and did receive the 7k fhog. property was in both mine and wife's name. was in nsw so also paid no stamp duty. we actually only lived there for 7 months so i did consider paying the 7k back saying we didnt meet the 6mths (tweaking the dates a little) so we would be eligible for it in QLD, but then would have also had to pay a nsw stamp duty liability so to get the 14k-21k increased FHOG we wouldve had to pay nearly that amt back anyway and go thru some hurdles..thats if theyd even give to us. too late to do that now anyways ;)
on capping lmi, depends on if you have existing credit card or loan facilities with CBA or STG

Both of these will do 95 % plus LMI lends ( to a max around 97) for existing clients

There are a couple of other smaller lenders that will do 95 with capped lmi, but youd need to fish around with a broker to see if there is a fit


You have done well to save $14,500, that is quite an achievment!

Your calculations are close - don't forget the Transfer Registration Fee of $414 and Mortgage Registration Fee of $125 - and I guess you really do need the building and pest inspections if you are in a known termite zone

As you have saved the 5% from ordinary income / any lump sums are more than 3 months old, you have a couple of lenders to choose from which will lend to non-existing customers to 95%LVR and capitalise the mortgage insurance.

However, this means that you will still have to be able to demonstrate - at time of making the application - funds to complete of about $5,000.

The $5,000 can come from anywhere at time of making the application - so can you get a Letter of Gift for this amount provided, of course, that you can make settlement under your own steam. So a three or four month settlement would allow you plenty of time to save up the extra $5,000 required to complete.

Hope this helps
Thanks for the advice. Is there any benefit structuring it as an IP instead of PPOR to get over the line with a lender, or is it not going to make any difference and what I am lacking ATM is just deposit/purchase cost funding?

I dont have any a/c's with STG or CBA. Thanks for the heads up on the transfer fees I will add this to my calculations.

I might knuckle down and try and get about another 5k under my sleeve then get things moving. that way I should hopefully scrape in with a lender and still have a small contingency plan for any unforseen costs/interest rate rises etc.

At the moment I have a car loan of around 9k owing, paying $75/wk in repayments for around the next 4 years. Is this a bad thing or is it pretty normal for everyone to have a car loan these days? I do have 9k of my deposit money parked in the car loan account as extra repayment (redrawable) so instead of paying 9% interest im only paying about $0.50 c a month in interest on that loan. When it does come time to buy do I need to pull the $ out of the loan and sit in a "savings account" so it looks like genuine savings, or is this pretty normal/leave it as - is ok?
Hi dammit

Redrawable pre-payments on a personal loan can be taken as Genuine Savings, so no need to move the funds

Investment loans take potential rent into account, so may help with serviceability, however, whether investment or owner occupied, you still have to show Funds to Complete at time of making the application

If you buy as investment, you still have to live somewhere so your rent payments would detract from serviceability

As mentioned, if you can get a Letter of Gift for the remaining $5,000, and negotiate a longer settlement to allow time to save the $5,000, then you can get underway with what you've got