Our Owner Occupied home loans are ideal for people seeking an affordable home loan with all the benefits. Talk to one of our experienced Home Loan Specialists and find out how we can help you.
At Homestar Finance, we want our customers to find the best home loan packages that suit their needs. Whether it’s your first home, you’re looking to refinance or finding an investment property, Homestar’s award-winning home loan rates are here to help.
Star Gold
Variable Principal & Interest
1.79%
Interest rate p.a.1
1.84%
Comparison rate p.a.1,2
Star Essentials
Variable Principal & Interest
2.24%
Interest rate p.a.1
2.27%
Comparison rate p.a.1,2
Star Classic
Variable Principal & Interest
2.34%
Interest rate p.a.1
2.37%
Comparison rate p.a.1,2
Star Classic Fixed
Fixed Principal & Interest From
5.14%
Interest rate p.a.1
2.62%
Comparison rate p.a.1,2
| Fees | Star Gold Owner Occupied | All Other Products (Variable Rate) |
All Other Products (Fixed Rate) |
Star Classic Owner Occupied Construction |
| Principal & Interest | Principal & Interest | Principal & Interest | ||
| Application Fee | $395 | $0 | $0 | Refer to the fees located on the Construction page |
| Annual / Monthly Fee | $0 | $0 | $0 | |
| Valuation Fee (per property up to $1m) | $244.203,4 | $244.203,4 | $244.203,4 | |
| Legal Preparation Fee | $2643,4 | $2643,4 | $2643,4 | |
| Fixed Rate Lock in Fee (optional) |
✘ | ✘ | $4953,4 | |
| PEXA Fee | $59.07 3,4 | $59.07 3,4 | $59.07 3,4 | |
| Government Charges | At Cost3,4 | At Cost3,4 | At Cost3,4 | |
| Disbursements (including title search fees) | $1503,4 | $1503,4 | $1503,4 | |
| Discharge Fee | $5355 | $5355 | $5355 |
An owner-occupied home loan is a unique type of home loan, perfect for people who are taking out a home loan to live in their new property.
Hence the title, ‘owner occupied’, this type of home loan is best for people who want to obtain a home loan for a property they intend to live in.
Owner-occupied home loans can include holiday homes that won’t be rented out, or blocks of land to build a house to live on. As long as the property is for residential purposes only, an owner-occupied home loan can apply.
Owner-occupied home loans incentivise people new to the property market to join, giving them benefits for what is presumably their first home.
Owner-occupied home loans matter because they change the nature of the traditional home loan, with bigger incentives for people to stay and live on the property they are
investing in. This helps to also fight fraudulent investors who are using the benefits of owner-occupied home loans for an investment property.
Owner-occupied home loans differ from other home loans, such as investment properties or mortgages for second homes. Generally, these are financial investments rather than residential homes, as the owners typically do not reside in these properties. These loans come with higher costs and fees associated with them because lenders see investors as higher-risk borrowers, compared to first homeowners.
When applying for a home loan, your creditor will assess your financial situation, employment status, and other impacting factors for your application.
Your creditor will commonly refer you to an owner-occupied home loan, however, if they don’t it is a good idea to inquire about one. There are different loan options out there and you need to find the one that is best for you.
Owner-occupied home loans work like a regular loan, the only differences are the lower interest rates and subsequent conditions to be met.
When you take out a home loan and your application to borrow is accepted, you must pay back the principal of the loan plus interest.
The rate can be fixed or variable, sometimes with the option to have both. Some creditors offer interest-only loans too.
Deposits are required when taking out a home loan, normally around the 20% mark. If your loan is borrowing more than 70% of the property value, a lender’s mortgage insurance (LMI) might be required too. This is to ensure you will be able to repay your home loan.
The biggest benefit of an owner-occupied home loan is the decreased risk, compared to investment properties and mortgages for second home loans.
Owner-occupied home loans allow the borrower to live in the home for 12 months, which is usually of benefit to the borrower.
Owner-occupied home loans also carry lower interest rates, fewer fees, and different penalties than obtaining a traditional mortgage for a second home loan. If after 12 months of occupation the owner decides to sell the property, they can have a lower capital gains tax compared to if it were financed as an investment property.
The owner may also meet requirements to qualify for a homestead exemption on property tax, making it advantageous to choose this financing option. This is even better when the mortgage interest and property tax is deductible as well.
When obtaining an owner-occupied home loan, you are required to live in the property for usually 12 months. This requirement is fundamental to the loan, and if not complied with, you could be dealing with fraudulent misconduct.
Occupying the property can also be defined as:
The Australian Tax Office has the following criteria for ‘main residence’ property:
Currently, the interest rates for owner-occupied home loans are at record lows. Many interest rates are below 3% p.a which is considered very low.
The interest rates for owner-occupied home loans are far lower than investment home loans. Because borrowers for owner-occupied home loans generally have fewer risk factors compared to high-investors, the rates reflect this.
There are fees associated with owner-occupied home loans, including the following:
There are many features of an owner-occupied home loan, including the following:
It is possible to change from owner-occupied property to an investment property, and if this occurs then the features will dissolve and new conditions will be implemented for the changing nature of the property.
Lenders are looking for people often newly entering the property market, or people with a small investment portfolio. High-level investors are not normally applicable for the owner-occupied home loan because of their increased risk levels with investments.
People entering the property market for the first time are viewed as less risky than high-level investors with multiple repayments.
Lenders will grant permission for your loan when you meet the criteria they set. They will analyse your financial situation and if they deem your status suitable for a loan, they will approve it.
The biggest difference between owner-occupied and investor loans is the nature and intention of the property.
Owner-occupied loans are for people who are planning on living in the property as residents.
Investor loans are for people who want to use the property as a rental and not a family home.
You can do this after the allocated period has lapsed, generally 12 months. If you want to rent your home out before the allocated period you will likely be subject to fees and costs associated with investment properties rather than residential properties.
Generally speaking, yes, you can get another mortgage.
However there may be restrictions surrounding the second mortgage, and you will need to consult with your financial adviser. You will likely need to meet conditions specific to your current financial situation, such as having repaid a certain amount of your current mortgage or having other financial assets available as borrowing power.
You can save money on an owner-occupied home loan because there are fewer costs involved. For example, the fees and interest rates are lower than an investment property home loan. As well as these lower rates, there are added fiscal benefits of obtaining owner-occupied home loans such as tax deductions and government grants.
Overall, the combination of these benefits allows for more favourable conditions to save money, as less money is being invested in the property.
Working out potential home loan repayments? Looking at loan refinancing options? Just curious? Our range of calculator tools can help you make informed decisions on the best products or offerings to add value, reduce repayment stress and save money.
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Homestar Finance Pty Ltd ACN 109 413 498 (Australian Credit Licence Number 390 860) has been providing affordable and accessible home loans to Australians since 2004. We are a wholly owned subsidiary of Columbus Capital Pty Ltd, an Australian private company with over $7 billion in loans under management.
Homestar Finance are proud Official Partners of Sydney Thunder Cricket Team and are the naming rights partner of the Homestar Finance Sydney Thunder Indigenous XI.
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1 Rates shown apply to new eligible Owner Occupied loans only, loan limits may apply depending on your product (refer to the product page) and at least one applicant is on PAYG employment. For fixed rate loans, after the fixed rate term, a variable rate will apply. Rates are subject to change without notice. Existing borrowers may have different interest rates which are dependent on the rate offered to the borrower at the date when a home loan settled and any reductions or increases the lender decided to make on the existing loan over time. Accordingly, there is not one standard variable rate that applies to all Homestar home loans and existing customers can confirm their current rate(s) by logging in to internet banking or by contacting customer service. Terms, conditions, and eligibility criteria apply.
2 Comparison rates are based on a basic Homestar loan, on a $150,000 loan amount over 25 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
3 Third party cost(s) incurred by service provider(s) are payable and may vary or increase depending on the service provider, nature of the service and request. Any additional cost(s) are passed on directly to the applicants(s). If there is a variation or an increase, a separate quote will be provided..
4 Disbursements may also be payable.
5 Discharge fee is waived if loan reaches full term as per the loan agreement.
Other fees and charges may apply.
DISCLAIMER: Terms, conditions and eligibility criteria apply to all our loan products and features. Fees, charges and disbursements are payable. Final approval is subject to credit assessment. Information valid as at 12th May 2022 which is subject to change without notice. Please consider if the product is appropriate for your individual circumstances. If you need assistance or have any questions about a product or feature and its suitability, please contact our Loan Specialists.
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