Postcode Location Guide
Disclaimer: Our Postcode Calculator should be used as a guide only. It is based on the location restrictions used by major banks and lenders mortgage insurers. Please note that special property types might have additional requirements, please call 1300 889 743 to speak to a mortgage broker about your situation.
What are location restrictions?
Each lender and LMI provider has a guide that assigns a category for each postcode in Australia. There are typically five categories:
- Category 1: Metro areas, capital cities in each state & major regional centres with a large population. Generally considered to be low risk.
- Category 2: Medium sized regional centres. Considered to be low to medium risk.
- Category 3: Smaller towns with fluctuating property markets. Considered to be medium to high risk.
- No Category / National Locations: All other postcodes that are not included in the above categories. Considered to be a very high risk.
- High Density: Inner city suburbs or areas with high rise residential buildings. High density units in these areas are considered to be very high risk.
A particular area or postcode may have different classifications for different lenders depending on their interpretation of the property market in that area. Some lenders will also take historical data into account. For example, Genworth Financial considered Western Sydney to be high risk because they have had a lot of losses in that area.
Why do lenders have postcode categories?
Lenders assess loans differently depending on the location of the property being offered as security. They apply stricter lending policies to high risk locations to limit their risk. In most cases, this means they often reduce the maximum available LVR and the maximum loan amount that you are able to borrow.
For example if you apply for a 95% mortgage in a Category 3 location, the lender may decide that this is too high a risk and therefore may request that you reduce your loan to 90% or 80% LVR. If this happens and you are unable to come up with a larger deposit, your mortgage application will be declined.
Home loans with no postcode restrictions
A couple of our lenders do not have any postcode restrictions and will consider any location in Australia, allowing you to borrow up to 95% LVR. You can read more on our no postcode restrictions page.
