Strata Unit Commercial Loan

What can I borrow?

• Where you are purchasing multiple units that are established, on the one title, there will be different applicant LVRs.
• Where it is 2-3 units you can borrow up to 90% of the value of the units.
• 4 units on title is usually limited to 80%, so LMI is not available.
• 5-6 units under one title will range from 70-75% of the value of the units.
• Up to 10 units on 1 title can still be done as a home loan with at 65%LVR with a good bank.
• Usually where you have more than 10 units under a single title, most banks will treat this as a commercial loan.
• Similar LVRs apply to multiple units on the same title when the property is not yet established, except 10 units under a single title will be limited to a 65% LVR. These loans also not meant to be for developers or builders, but rather those who are purchasing them for the purposes of investment.

You will need to be able to show that you can afford to service the loans as per usually bank criteria; so depending on how you are employed, banks will want to see evidence of a positive asset position as well as evidence of your income.

You will need to be able to show that you can afford to service the loans as per usually bank criteria; so depending on how you are employed, banks will want to see evidence of a positive asset position as well as evidence of your income.

• Where you are looking for a loan for a title holding more than 2 securities, valuations completed on the properties will be completed ‘in one line’. What this means is that they will be valued as a whole, single property as opposed to the individual properties themselves. The overall effect is that often this results in a lower valuation of the dwellings.
• Where you will need to construct, most lenders will use apply a maximum loan to value ratio by considering the total value of the land as it is currently and construction value; rather than what you think they will be worth once they are completed.
• Using this technique may mean that your loan to value ratio may not fit in with the bank’s criteria or it could also mean that mortgage insurance will now be applicable.

• Yes you can avoid an “In one-line” valuation.
• Where you have multiple units within a complex, most lenders will value this for you in 1 line, therefore reducing the valuation of the proposed group of properties. There are a select number of lenders who will allow up to 10 units within a complex to be valued individually giving the higher valuation position for the borrower.

Contact our office today and see how we can help structure a strata commercial loan for you to give you the best outcomes.