Flood zones

What does flood zoning mean?

If your home is in an area that can be affected by floods then your property may have a flood zoning. Flood zoning has many possible time frames, for example 1 in every 100 year zoning means that on average the property is expected to flood once every 100 years. This would be expressed as 1:100 year flood zoning.

If your property is zoned to flood more often than 1:100 years then you are unlikely to be able to obtain finance. In some cases you may be able to obtain finance for properties that flood up to 1:50 years if the maximum flood height is lower than the floor level.

How much can you borrow?

First home buyer: 95% of the property value.

Investor: 95% of the property value.

Low doc: 80% of the property value.

Greater than 1:100 year flooding: Case by case basis. Up to 1:50 year can possibly be accepted.

Discounts: Competitive professional package and basic loan discounts are available.

Note: Lenders are hesitant to lend to riskier flood affected properties. We may need to obtain additional records from council or a valuation report to be able to find a lender to approve your loan.

Why are the banks so conservative?

Obviously if there is a risk that your property will be damaged by floods then the banks don’t want to approve a home loan secured by that property! There are other issues with a flood zoned property including that council will probably not approve new developments on that land and that you may be unable to obtain flood insurance.

As a general rule 1:100 year zoned land is acceptable because this type of land can still be developed and buildings on the land can be insured. Because of this banks are willing to use them as security for a mortgage. Whereas up to 1 in 50 year flood zoned land may or may not be accepted.