I just know that buying an apartment only can have 70% home loan , while 80% for unit. Can anyone tell me why banks have this rule? Does that mean an apartment is less value than an unit if they are in same condition?[blink]
Hi Redfox,
Sounds like apartments may come under the Commercial Property umbrella, and therefore require the 30% deposit.
From what I’ve seen, even in times of spectacualr increases in property prices, apartments tend not to be great in the capital growth stakes, but with a 30% deposit they tend to be positively geared. Just remember what it is that you want from the transaction – growth or cashflow – or both [biggrin] before making your mind up and you’ll be fine.All the best,
Mark.
A short but simple answer – if banks lend less as a percentage then it means they consider that particular type of property as a greater risk.
In effect this means that the banks consider your apartment as a greater risk than the unit in your example.
Note some lenders will stretch the 70% limit on apartments from time to time.
Derek
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Skype – derekjones2113Sounds to me like the unit might be small in size or unusual in nature because i have never come across any lender that will only go to 70% LVR against the security of a standard size unit.
Richard Taylor
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I have never heard of that ‘rule’. I have helped clients purchase apartments/units with 95% loans many times.
BTW, what is the difference between an apartment and a unit?
Terryw
Discover Home Loans
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