Rate and pricing tier
Are you in the right pricing band?
Lenders price in steps tied to loan size and LVR. Falling just the wrong side of a threshold can cost you for years without you ever noticing.
OWNER OCCUPIER
A loan for the home you actually live in
Owner occupier lending is usually the cheapest money you will borrow. Getting the structure right is what makes it cheaper still.
IN SHORT
Owner occupier simply means the property is your home
Lenders price loans differently depending on what the property is for. A loan on the home you live in is typically priced better than one on an investment property, because the lender treats it as lower risk.
Beyond the rate, the decisions that matter are repayment type, whether any part of the loan is fixed, and whether you have an offset account working for you. Those choices change what the loan costs over its life more than a small rate difference usually does.
If you already have an owner occupier loan and have not looked at it in a few years, it is worth checking whether it still competes.
WHY IT HELPS
What we look at
Offset and redraw
Is your cash working against the loan?
Salary sitting in a plain transaction account earns very little. The same balance in an offset reduces the interest you are charged every day it is there.
Fixed, variable or split
How much certainty do you want?
A split loan gives you a fixed portion for predictability and a variable portion that keeps flexibility and offset benefits. It suits a lot of households better than either extreme.
HOW IT WORKS
Structure is where the money is
Two households can hold the same loan amount at the same rate and pay very different amounts of interest over a decade, purely because of how the loan is arranged and how their cash flows through it.
- Principal and interest repayments build equity; interest only does not
- An offset account against the variable portion reduces daily interest
- Splitting lets you fix part of the balance without losing flexibility on the rest
- Loan term and extra repayment allowances change the total interest materially
- Package fees are worth paying only if you use what they include
IS IT RIGHT FOR YOU
Getting the most from an owner occupier loan
This tends to suit you if
- You hold a cash buffer — an offset turns idle savings into interest saved.
- Your income is regular — which opens up the broadest range of lenders and pricing.
- You have equity built up — a lower LVR generally means better pricing.
- You can make extra repayments — variable loans usually allow this without penalty.
Worth weighing up
- Fixed loans restrict flexibility — extra repayments are often capped and break costs can apply.
- Interest only defers the problem — repayments step up when the interest only period ends.
- Package fees are not always earned — an annual fee only pays for itself if you use the inclusions.
- Switching has costs — discharge, registration and application fees need to clear before you gain.
How working with us actually goes
Step 1
We start with a conversation, not an application
Step 2
We work out what you can borrow and what it costs
Step 3
We prepare the application and deal with the lender
Step 4
We stay across the loan long after settlement
COMMON QUESTIONS
Questions we get asked about this
Should I choose principal and interest or interest only?
For a home you live in, principal and interest is the usual choice: you pay down the balance and the loan actually ends. Interest only keeps repayments lower in the short term but the debt does not reduce, and repayments rise sharply afterwards to make up the ground.
Interest only has legitimate uses, more often on investment lending or through a defined period of tight cash flow, but it should be a deliberate decision with an exit in mind.
How does an offset account save money?
Interest on your loan is calculated daily on the outstanding balance. An offset account is linked to the loan, and its balance is subtracted from the loan balance before that calculation.
Keeping your salary and savings in an offset reduces the interest charged every day the money sits there, while leaving it fully available to spend.
Is it worth fixing my rate?
Fixing buys certainty, not savings. You are paying for a known repayment, and whether that turns out cheaper depends on where rates go, which nobody knows in advance.
Fix if repayment certainty genuinely helps you sleep or plan. Be aware that fixed loans commonly limit extra repayments, may not offer a full offset, and can carry break costs if you exit early.
How often should I review my home loan?
Every year or two is sensible, and sooner if your circumstances change — a pay rise, a new child, a renovation, or a fixed period about to expire.
Lenders frequently offer sharper pricing to new customers than to existing ones. A review either gets your current lender to improve, or shows that moving is worthwhile.
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GET IN TOUCH
Find out where you stand before you commit to anything.
Would rather talk it through?
(02) 9659 1694Important information
The information on this page is general in nature. It has been prepared without taking your objectives, financial situation or needs into account, so it is not personal advice and you should consider whether it is appropriate for you before acting on it.
Any rates, figures or examples shown are indicative only. Lending is subject to approval, and lender eligibility criteria, terms, conditions, fees and charges apply. Talk to us about what your own circumstances allow.