Home Loans: What's on offer for investors?

19 July 2016
Canstar releases its Bank of the Year – Property Investor Award

Despite many warnings over the past few years, the property investment market across Australia has yet to cool significantly, and Canstar’s analysis of more than 230,000 visitors to its home loan search tables since April last year shows that the proportion of visitors identifying as investors has remained constant.

“Since April last year, approximately 15 percent of visitors to Canstar’s home loan selector tables have identified as investors. While that figure might vary by one or two percent from month to month, overall it is very consistent,” said Canstar Editor in Chief, Justine Davies.

“State by state, NSW has the highest overall proportion of investors, at just over 17 percent overall. That figure has increased though in recent months; in June almost 21 percent of NSW-based visitors to Canstar’s home loan selectors identified as investors and far in July that number more than 21 percent.”

What interest rate do investors pay?

Lenders have increasingly begun tiering their home loan interest rates, with some charging a slightly higher rate for investors as compared to owner-occupiers. Currently on Canstar’s database, minimum, maximum and average home loan rates for investors are as follows:

Table: Investment Home Loan Market – Snapshot of the current market
Basic Variable Package Variable 1 Year Fixed 3 Year Fixed 5 Year Fixed
Average 4.69% 4.61% 4.50% 4.45% 4.85%
Min 3.95% 3.79% 3.69% 3.69% 4.27%
Max 5.65% 5.15% 5.29% 5.30% 5.61%
Source: www.canstar.com.au, the search results do not include all home loan providers, and may not include all features relevant to you.

In terms of the investment premium, Canstar analysis has found that the difference in average home loan rate between owner-occupiers and investors is as follows:

Table: Difference in average interst rate: owner-occupiers/investors
Basic Variable Package Variable 1 Year Fixed 3 Year Fixed 5 Year Fixed
Average: Investor 4.69% 4.61% 4.50% 4.45% 4.85%
Average: Owner Occupier 3.95% 3.79% 3.69% 3.69% 4.27%
Difference 0.25% 0.28% 0.22% 0.24% 0.20%
Source: www.canstar.com.au, the search results do not include all home loan providers, and may not include all features relevant to you.

Institutions that offer outstanding value

Anz wins 2016 Bank of the Year Property InvestorThe majority of property investors are keen to get the best possible value out of their home loan product, and Canstar has researched more than 200 features of 360 home loans from 60 loan providers, to determine which institutions are offering outstanding value home loans as well as additional services that benefit investors in making an informed decision when purchasing an investment property.

Canstar Property Investor Awards recognise excellent achievements on two levels, national and state. Bank of the Year is awarded to an Institution which offers an outstanding value proposition across all states and territories. Customer Owned Institution of the Year Award goes out to one Institution that is present in the particular state or territory and offers outstanding value to Property Investors.

ANZ a winner

ANZ has won Canstar’s Bank of the Year – Property Investor Award for 2016, with a winning combination of price, features and service. Some of the winning features included the availability of family guarantee options, a competitive product offering and a wealth of investor-specific information available and easily-accessible online. Canstar congratulates ANZ on its national achievement.

State winners

NSW, SA, WA: Customer-Owned Institution of the Year – Beyond Bank

Beyond Bank: Outstanding Value Award WinnerBeyond Bank impressed the Canstar researchers with a highly competitive product offering, including the following features:

  • Family can guarantee a loan for investors, and guarantor can provide deposit and security.
    • LMI and stamp duty can be added to the loan balance and loans allow for cross collateralisation.
    • Property investors can access calculators, property reports, step-by-step guides, and property buying checklists.
    • Financial planners and personal managers are available to help property investors.

QLD: Customer-Owned Institution of the Year – Heritage Bank
Heritage Bank wins Canstar award

With its head office in Toowomba, Heritage is Australia’s largest mutual bank, with a terrific offering for property investors, including:

  • Family can guarantee a loan for investors, and guarantor can provide deposit and security.
    • Website provides property reports, information on the process of buying an investment property, an explanation of costs associated with buying a house including stamp duty, council rates and other additional costs, step-by-step guides and property buying checklists.
    • A dedicated home loan helpline is available for investors and a number of different calculators are on the website to help investors evaluate their borrowing options.

VIC: Customer-Owned Institution of the Year – Hume Bank
Hume Bank:Outstanding Value Award Winner

Hume Bank impressed the Canstar research team with competitive pricing and features. Features on offer for property investors include the following:

  • Family can guarantee a loan for investors, and guarantor can provide deposit and security.
    • Cross collateralisation is allowed.
    • Website provides information on the process of buying a house, and explanations of the costs associated with buying a house including stamp duty.
    • Specialist lenders, financial planners, and personal managers are available for property investors.

Canstar congratulates the Property Investor Award winners. Consumers can download the Award report here.


For further information:

Justine Davies

Editor in Chief

Ph. (07) 3837 4151 | 0400 127733

About Canstar

Canstar provides Australia’s interactive online research service in consumer and business finance. Founded in 1992, Canstar Pty Limited is Australia’s researcher of retail finance information for over 250 institutions such as Banks, Building Societies, Credit Unions, Finance Companies, Brokers, Mortgage Originators, Life Companies and finance related Internet Portals. Canstar customers use the extensive database for competitor analysis as well as a means of disseminating their product range. Canstar also distributes this information to print and electronic media for publication and to Agents, Accountants, Brokers and Internet Portals for use in advising their clients.

What are the Canstar star ratings?

Canstar researches, compares and rates the suite of banking and insurance products listed below. Results are freely available to consumers who use the star ratings as a guide to product excellence. The use of similar star ratings logos also builds consumer recognition of quality products across all categories. Please access the Canstar website at www.canstar.com.au if you would like to view the latest star ratings reports of interest.

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To the extent that the information in this report constitutes general advice, this advice has been prepared by Canstar Research Pty Ltd A.C.N. 114 422 909 AFSL and ACL 437917 (“Canstar”).  The information has been prepared without taking into account your individual investment objectives, financial circumstances or needs.   Before you decide whether or not to acquire a particular financial product you should assess whether it is appropriate for you in the light of your own personal circumstances, having regard to your own objectives, financial situation and needs.  You may wish to obtain financial advice from a suitably qualified adviser before making any decision to acquire a financial product.  Canstar provides information about credit products. It is not a credit provider and in giving you information it is not making any suggestion or recommendation to you about a particular credit product.  Please refer to Canstar’s FSG for more information.

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