Is It a Commercial or Residential Property? | Client Story

A Quick Overview

Details Description
Customer Goal To get approved for a residential property at a 95% LVR
Problem The property had a 7 unit apartment approval, and the clients were not sure if the lender would consider it a commercial or residential property.
Loan Amount $661,290
Security $725,000
LVR and Term 95%, 30 years
Income $155,000 p.a.
Solution Provided a statutory declaration stating they will use it as a residential property and not develop it.

Looking to move in together

Katie and Adam decided they want to live together after a year of seeing each other. Katie was a senior associate at a reputable law firm, and Adam was a medical scientist at an established medical research centre.

After getting a pre-approval with the help of our specialist mortgage broker Rojina Shivabhakti, they started looking for a home.

They found a perfect home for themselves at a convenient distance from their workplaces.

On top of the total income of $155,00 p.a. between the two of them, Katie had equity on an existing mortgage that she was planning to use to purchase this new home.

They were confident that they could quickly get a home loan with their situation. Little did they know, the property would be viewed differently by the lender.

The problem: Assessed as Commercial Property

When you apply for a home loan, most lenders assess how risky the property is.

In this case, the property that Katie and Adam found had a pre-existing development approval of a 7-unit apartment. This meant that this could be turned into a commercial property.

Lenders view commercial properties as higher risk than residential properties, and the lending policies for commercial property is also stricter compared to residential property.

Katie and Adam sought to borrow 95% of the property value. However, since the lender would view it as commercial property, there would be restrictions on how much they could borrow.


Rojina understood that Katie and Adam were only looking to buy the property to live in it and were not looking to develop it into a commercial property. She also understood that lenders would not take the client’s word for it.

Rojina suggested that they get their solicitor to provide them with a statutory declaration to clarify their situation to the lender. This assured the lender that it would be used as a residential property, which meant that the risks they thought it might present in the future were mitigated.

The lender then provided an exception approval to the property for it to be considered residential based on the statutory declaration.

A new beginning

With Rojina’s help, Katie and Adam got formal approval before the finance date, which made them really happy!

They were grateful to Rojina for making the process smooth for them and for handling the situation in a calm, professional manner.

The loan settled, and they have just moved into their new homes. They can’t wait to start this new chapter of their lives!

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