The owner occupier is someone who intends to live in the property they purchase.
Do mortgage lenders check your owner-occupancy status?
Each lender may have their own different criteria on determining your status as an owner-occupier at your property. For example, a house is your primary residence if:
- you live at the property for the majority of the year
- you have documentation such as tax returns or a driver’s license that shows the property as your primary residence
What happens if you lie to your lender about being an owner occupier?
Lying to your lender can carry serious consequences.
If you apply for a home loan as an owner occupier but you intend to use the property as an investment, your lender can deny you a home loan. This can also negatively affect your credit score, meaning other lenders might be more reluctant to approve you for a loan in future.
Depending on the circumstances it may also be considered a crime for fraud.
If you own a property as an owner-occupier, but you intend to rent it out later, it is also important to inform your lender of this.
If your lender finds out that you have moved out and are making rental income from the property while still on an owner-occupier loan, then depending on the situation and the terms of your loan contract they could make the decision to recall the loan. This means that you might be given 30 days to pay off the balance owing, at which point the lender may sell the property to recoup the money they are owed.
How to change your home loan from owner-occupier to investment?
If you are considering moving out of your new home as a primary resident and turning it into an investment, you can consider the following refinancing options for your home loan:
- Refinance with the existing lender: Inform your existing lender / mortgage broker and they can help you look at refinancing your home loan as an investment property. Consider asking for a better interest rate as a loyal customer.
- Refinance with another lender: Shop around and consider refinancing with another lender.
Consider the frequency of refinancing, as it can have impacts on your credit score.
