What is a residential loan?


Liron Nehmadi
Jun 24, 2016( 1 min read )

A residential loan is the name given to loans that are borrowed to purchase a property that the buyer will live in. Also known as owner-occupier loans, banks will sometimes offer lower interest rates and facilities to people who fall into this category.

The other type of popular home loan is the investor loan for people who intend to purchase a property for investment purposes only. These loans may also be referred to as residential investor loans or investment loans and may attract higher interest rates.


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Determining who has the ‘best’ home loan really does depend on your own personal circumstances and requirements. It may be tempting to judge a loan merely on the interest rate but there can be added value in the extras on offer, such as offset and redraw facilities, that aren’t available with all low rate loans.

To determine which loan is the best for you, think about whether you would prefer the consistency of a fixed loan or the flexibility and potential benefits of a variable loan. Then determine which features will be necessary throughout the life of your loan. Thirdly, consider how much you are willing to pay in fees for the loan you want. Once you find the perfect combination of these three elements you are on your way to determining the best loan for you. 

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