What if you’re considering using your first home loan to purchase an investment property instead? It’s a question that many first-time homebuyers in Australia may have.
Q: What is an investment loan?
A: An investment loan is a type of loan designed for property investors. Unlike first home loans, investment loans are designed for borrowers who are looking to purchase a property for investment purposes, such as renting it out or flipping it for a profit. Investment loans typically have higher interest rates than first home loans, as they are considered to be higher risk.
Q: Can I use a first home loan to buy an investment property?
A: In short, the answer is no. First home loans are specifically designed for owner-occupiers, which means you must intend to live in the property as your primary residence. If you’re looking to buy an investment property, you’ll need to apply for an investment loan instead.
Q: Why can’t I use a first home loan for an investment property?
A: Using a first home loan to purchase an investment property is not allowed because it goes against the purpose of the loan. First home loans are designed to help first-time buyers get into the property market by purchasing their first home. The Australian government offers these initiatives to help reduce the barrier to entry for first-time buyers, and using the loan for an investment property would not align with this purpose.
If you’re a first-time homebuyer in Australia and you’re considering purchasing an investment property, you’ll need to apply for an investment loan instead of a first home loan. Investment loans are specifically designed for property investors, and they offer different features and benefits compared to first home loans.