Interest rate if I will rent out PPOR?

[Azza]

Hi,

I've got split loan paperwork from CBA, for my PPOR.

For variable part, I have 0.85% margin below standard. For fixed part, it's 0.45% below.

Hovewer, "When security property is leased" - margin became zero for both parts....
Called my bankier and asked why the bank will slap me if I will decide to rent out my property.

Here is a reply:

The bank doesn't need to know if you lease out your property. This section of the Consumer credit contract is still in the contracts from when interest rates on investment loans were different to those for owner occupied H/L's.


What??? I thought I have to tell the bank if I leasing out the security...
Can anyone explain?

 

[TheCamel]

I haven't told CBA i'm leasing out my property.

what your banker is telling you, is that the wording in your contract is, in a way, out of date, or at least not relevant to the present climate.

back in the day, there would have been Interest Rate X for owner occupied, and maybe Interest rate X+Y for investors.
So, obviously, back then, if you wanted to make your property an ip, you'd tell them, they'd change it to X+Y

Now, it's just interest rate X for oo or ip, so they don't care.. as long as you make the repayments