Yes. Averaged across the banking system, investors pay a higher interest rate on their home loans than owner-occupiers do.

As at July 2026, the gap sits at roughly 0.2 percentage points, based on the Reserve Bank of Australia’s lending-rates data. That is a system-wide average, though — not a rate any individual borrower is guaranteed. What one lender actually charges depends on its own pricing, the loan’s size and term, and the borrower’s own application.

In one line (as at July 2026): RBA data puts the average investor home loan rate about 0.2 percentage points above the average owner-occupier rate — a gap set by individual lenders inside a shared regulatory framework, not by the Reserve Bank directly.

How big is the gap between investor and owner-occupier rates?

The Reserve Bank publishes average lending rates by loan purpose in its Table F6 series. As at July 2026, the most recently published figures show:

Loan book	Owner-occupier	Investor	Gap
Outstanding loans	6.20%	6.43%	~0.23 percentage points
New loans	6.22%	6.39%	~0.17 percentage points

Source: RBA Table F6, Lending Rates.

Both gaps round to about 0.2 percentage points, which is the figure worth remembering: investors typically pay around 0.2 percentage points more than owner-occupiers, averaged across the system. On a $500,000 loan, 0.2 percentage points works out to roughly $1,000 a year in interest — a rough illustration of the average gap, not a quote for any specific loan.

These are averages across every lender reporting to the RBA, not a single published “investor rate.” Two people borrowing the same amount from two different banks — one as an owner-occupier, one as an investor — will each get whatever rate their own lender and application produce.

Does the RBA set the difference, or do lenders?

Neither entirely. The cash rate is the interest rate the Reserve Bank sets for overnight lending between banks, and it’s the main lever influencing the overall cost of funds across the banking system. As at July 2026, the cash rate target is 4.35%, up from 3.85% at the start of the year and unchanged at the Reserve Bank’s most recent review.

The cash rate moves the general level of rates up or down for everyone — owner-occupiers and investors alike. It does not, by itself, set the gap between the two loan types. That gap is decided separately, by each lender, when it prices its own investor and owner-occupier products.

Why do lenders charge investors more in the first place?

Both loan types sit inside the same broad regulatory system — this isn’t two separate regimes with investors carved out. ASIC’s responsible lending rules (Regulatory Guide 209) apply to residential investment loans on the same footing as owner-occupier home loans: a lender must make reasonable inquiries about a borrower’s situation and take reasonable steps to verify it, for either loan type. The National Credit Code captures both through separate parts of the same provision — property bought for personal or household use falls under one clause, property bought for investment purposes under another — but both are still generally regulated credit.

On top of that shared base sits a prudential layer from APRA, the regulator that supervises banks. APRA’s guidance for banks (APG 223) expects a minimum interest-rate buffer of at least 3.0 percentage points on top of the actual loan rate when testing whether a borrower can afford a loan — applied the same way to new and existing debt, with no separate, lower buffer written for investor loans. Where investor lending is treated differently is on the income side: APRA describes a minimum 20% discount (“haircut”) on expected rental income as prudent practice when a lender works out how much an investor can borrow. That adjustment affects borrowing capacity — how much you can be approved for — rather than the interest rate on the note itself.

The actual gap between an investor rate and an owner-occupier rate, at any one lender, is that lender’s own pricing decision, made inside this shared framework. It can reflect a bank’s funding costs, its portfolio mix, its risk settings and its competitive position, and it varies from lender to lender — this article can’t and doesn’t attribute the 0.2 percentage point average to any single cause. The RBA figure above is a system-wide average of many individual pricing decisions, not a rule that applies to every loan.

Has interest-only lending been capped for investors?

Not currently. Investor loans are more likely than owner-occupier loans to be set up as interest-only, where repayments cover only the interest for a period and don’t reduce the loan balance. This has drawn extra regulatory attention before. In 2017, APRA wrote to banks expecting them to limit new interest-only lending to 30% of new residential mortgage lending overall, with stricter internal limits on lending above 80% loan-to-value ratio (LVR) — the share of the property’s value being borrowed — and close scrutiny above 90% LVR.

That was a temporary supervisory benchmark, not a law, and APRA removed it in stages from 2019 once new interest-only lending had already fallen well below the 30% mark. As at July 2026, there’s no reinstated numeric cap. Current guidance instead expects each bank to manage the risk through its own lending policy — including, for owner-occupiers specifically, expecting a documented reason before approving a longer interest-only period.

What this means when you’re comparing loan options

None of the above settles which loan structure or lender suits a particular investment property — that depends on your own borrowing capacity, cash flow and goals, and it’s a conversation worth having with a mortgage broker or licensed adviser who can compare current offers against your situation. A few factors worth weighing side by side:

• Repayment structure and cash flow. Principal-and-interest repayments reduce the loan balance over time; interest-only repayments are typically lower month-to-month but don’t. Our guide to cash flow positive vs negatively geared property works through how loan costs interact with rental income either way.
• How much you can actually borrow. The ≥20% rental-income haircut and the interest-rate buffer both feed into a lender’s serviceability assessment — the same shared framework covered above — so the headline rate is only one part of what determines your borrowing capacity.
• Total cost, not just the advertised rate. Fees, loan features and the rate itself all move the real cost of a loan; comparing on the headline rate alone can miss the bigger picture.

None of these factors point to a single right answer for every investor. They’re inputs into a decision that depends on your circumstances — which is exactly why a broker or adviser conversation, rather than a generic recommendation, is the useful next step. For the wider picture of how loan costs sit alongside other property investment costs and risks, our guide to what property investment in Australia involves is a good starting point.

Quick answers about investor vs owner-occupier rates

Does the RBA set investor interest rates directly? No. The RBA sets the cash rate, which influences banks’ overall cost of funds. Individual lenders then set their own investor and owner-occupier rates on top of that.

Is the roughly 0.2 percentage point gap the same at every bank? No. It’s a system-wide average calculated from RBA data. What any one lender charges an investor versus an owner-occupier is that lender’s own pricing decision.

Is interest-only lending still capped for investors? Not currently. A temporary 30% supervisory benchmark applied from 2017 and was phased out from 2019; as at July 2026 there is no reinstated numeric cap, though lenders are expected to manage the risk through their own policies.

Does a higher investor rate reduce how much you can borrow? It can contribute, alongside the ≥20% rental-income haircut and the interest-rate buffer that lenders apply when assessing serviceability. How much you can borrow always depends on your full application, not the headline rate alone.