Postcode Location Guide

Postcode details

Find out if the location of your property is viewed as a high risk by the banks.
Postcode
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What are the location categories?

Each lender and LMI provider has a guide that assigns a category for each postcode in Australia. There are typically five categories:

  • Metro Plus: Established properties in well sought after metropolitan locations. Very low risk.
  • 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 aren’t 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 considers Western Sydney to be high risk because they’ve had a lot of losses in that area.

On the other hand, QBE LMI has more restrictions on some areas that have an unstable economy.

Is your location considered to be high risk?

Please call us on 1300 889 743 or fill in our online enquiry form because we may still be able to help by choosing a lender that doesn’t have postcode restrictions.


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 in 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’re 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’re unable to come up with a larger deposit, your mortgage application will be declined.


Home loans with no postcode restrictions

Some of our lenders don’t 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.

Although, there are lenders with no location restrictions, they may limit your loan amount in some states due to comments made by their valuer.

Typically NSW, VIC, QLD and the ACT do not have problems like this due to the valuer. However TAS, SA, NT and WA have extremely remote areas which cause some valuers to list adverse comments in their report to the bank.


How does the Genworth Security Location Guide work?

The Security Location Guide created by Genworth is used by mortgage brokers and lenders to determine how Genworth will view the risk of a postcode and the borrowing limit that they will be willing to approve.

As Genworth is one of the largest mortgage insurers in Australia, their assessment of postcodes and the risk they pose affects many lenders and how much they can approve for home loans that are over 80% of the property value (80% LVR).

Genworth postcodes are in different groups using the population of the area, the size of the postcode (km2), number of sales per annum and median house prices.

In addition to the normal categories, Genworth also has high density postcodes where policy restrictions apply to apartments.

How does the QBE Location Guide work?

QBE’s Location Guide has a similar breakdown of postcodes and risk as Genworth but there are less categories and no high density postcodes.

Metro areas are generally acceptable and regional areas are acceptable as long as the loan isn’t too large while other areas are on a case by case basis.

QBE defines a property as being high density based on the size of the block of units, not because of the postcode. Please refer to our inner city apartments page for more information.

Call us on 1300 889 743 or fill in our online enquiry form to get started on your property buying journey today.

  • Michael

    I have applied for a home loan in NAB last month, however they turned me down saying that the postcode was risky one. What are the specific criteria that makes a postcode or a certain address more riskier than the others?

  • Hi Michael,

    Different banks have different policies on what type of security is acceptable and have a risk matrix based on various factors. For a guide, they assess the risk based on the marketability of the property, population size, real estate values, comparable sales, local economy and presumed future of the area where the property lies. When assessing a home loan application, they consider all these factors.

  • Smaug

    I want to borrow 80% for a 420k property that’s zoned as a farm but only has a residential house and 15 acres on it and it’s a category 4 location. I earn 92k a year, have been working for over a decade in my current job and have no dependents plus no major issues. I went to a bank and they told me that won’t go over 70% so am I really stuck with that LTV?

  • Hey Smaug,

    We may be able to find you a lender that can go 80% but that will depend on a few factors such as the condition of the property, whether or not it’s flood zoned, irrigation licence, etc. Please call 1300 889 743 to discuss this with an expert mortgage broker or have one of us contact you instead by simply placing an online enquiry:
    https://www.homeloanexperts.com.au/free-quote/

  • jett

    The bank I went with earlier reject my application although it was just a small town. They said that it was due to lack of comparable sales. No other option then?

  • Hi jett,

    If you are buying in a small town then the property market will not be very active and as a result the bank valuer will be unable to find comparable sales. The great news is that some lenders can accept properties even with few comparable sales. You may need to reduce the percentage that your are borrowing against the property value (LVR) to enable you to get approval.

  • chaf

    How much can I borrow to buy a hobby farm? It desn’t seem to be in a very high risk location so I should be able to go more than 80%, right?

  • Hi chaf,

    The amount you can borrow generally depends on the size of the property. You may be able to borrow up to 95% of the property value for a hobby farm of up to 50ha. If it’s between 50-60ha then this will drop to 80% LVR. For land size up to 100ha, this will be 70-80% LVR. Please check out the hobby farm loans page to learn more:
    https://www.homeloanexperts.com.au/property-types/hobby-farm-loan/

  • Louis

    Will I be able to borrow to buy a property in a no category location?

  • Hey Louis,

    Some of our lenders do not have any postcode restrictions so they consider no category locations in Australia and allow you to borrow up to 95% LVR. They may limit your loan amount in some states though. Please call us on 1300 889 743 if you’d like to speak about this with one of our experts.

  • Mel Semmler

    wanting to buy 18acre property on outskirts of 5412. Selling price 280. Currently have mortgage 165K will rent this property out to family. Have 100+ equity. Borrowing amount 300K. 7K credit card. 1 adult child at home but has job. Earning 100K+ jointly. Applying Peoples Choice. what are chances?

  • Hi Mel,
    I’m not sure about People’s Choice Credit Union’s policy so you’d need to discuss with them. However based on what you’ve said it’s likely we can get you to qualify with another lender if that doesn’t work out.

  • Zoe Q Lin

    Is this still relevant? Bought off the plan is Homebush…

  • Hi Zoe,
    Yes this is up to date information. Homebush is a high density location. If you have the specific address of the property you purchased (no need for unit number) then we can confirm the lending rules for that block.

  • Bidaan

    Hi Team, Does the location of a property determines whether we will get the first home owners grant or not?

  • Actually, no Bidaan. Some lenders have certain restrictions about specific location and they’ll restrict whether you’ll get approved for a mortgage or not.. The First Home Owners Grant (FHOG) is independent of the location, however, the grant amount will vary depending on which state you are in. Also, it’ll be based on whether you are buying a new or established home, if you are buying vacant land and building and the purchase price of the property that you are buying.
    Please go through our First Home Owners Grant for more info https://www.homeloanexperts.com.au/home-loan-documents/first-home-owners-grant-guide/

  • Simon

    Hi team, am looking at 250acre property West nsw $650000 purchase price,fully established farm, family income $150000 deposit $100000-$120000, I would like to no what I can borrow and at what deposit I would need Any help would be great
    Cheers. Simon

  • Hi Simon
    The problem would be your deposit size. For properties over 60 ha (148 acres) you need to have a substantial deposit. In most cases you can borrow 60% or maybe 70% of the property value. So you’d be quite a bit short unless your family can gift or loan you a deposit or unless you have other property that you can add as additional security for the loan.

  • Chelsea

    Hi Team, My friend is looking at a 50 acre property with 3 bed house, $380,000 in post code 4702. Single man, no dependents, $15,000 – $25,000 deposit, first home. Only other debt is a $20,000 car loan which is up to date. Current income is $130,000 annual. Would this deposit be enough?

  • Hi Chelsea
    This is a high risk location. Around Rockhampton and the Bowen Basin is a known problematic area for lenders as they’ve had high levels of defaults in the past so they want to limit their exposure.
    We have some lenders that can consider lending 90% LVR (90% of the purchase price). Alternatively with a guarantor loan https://www.homeloanexperts.com.au/guarantor-home-loans/ he can borrow 105%.

  • Chelsea

    Thank you for your quick reply! Does this apply to all properties within the rockhampton region or just rural?
    He doesn’t think he will be able to find a guarantor.

  • It’s a bit of a checkerboard. If you can send me some you are interested in I can check them out for you. E.g. Rockhampton QLD 4700 is ok to 95% with some lenders and is restricted for others.

  • Chelsea

    661 ridglands road, Alton downs 4702

  • Yeah 4702 is restricted to 90% LVR. I’d recommend that you look at other postcodes or consider buying in town if you can’t get a larger deposit.

  • Chelsea

    Thank you for your advice, so deposit would need to be $39,000 or more?

  • As there’s the cost of LMI and conveyancing I’d say more like $45,000 approx.

  • Dean Marsh

    Hi Team, I’m looking at refinancing my debt into my home loan. Home loan sits at 385k house worth 400k. Want to add in 60k of debt. Parents are guarantors for 30% atm but dont want to add my debt in unless I can find someone that offers only 20% guarantor? Can you help. postcode 4740

  • Hi Dean
    The Mackay area has some location restrictions but can be ok with a guarantor.
    Just to clarify:
    – Current home loan is $385k
    – Current home value is $400k
    – Other debts are $60k
    – Total loan required is $445k
    – Are your parents working?
    – Do they have an existing mortgage?
    – How much is their home worth?
    Is that correct?

  • Dean Marsh

    Correct Dad works and earns 160k a year and they dont have existing mortgage on the house that secures it and that value is 700k

  • Hi Dean
    This would be a case by case loan. The issue is that a guarantor loan isn’t supposed to be used to refinance and consolidate debt. It’s supposed to be used to purchase a property. We would need to research with the lenders to confirm that they will consider this. We’ve done a couple like this in the past where there were mitigating circumstances.

    The requirements would be:
    – Parents must be aware of the debts and confirm they are ok to proceed
    – Guarantee will exceed 20%, this cannot be avoided with any lender. Estimate $120k – $160k guarantee.
    – Signed undertaking from you required that you will not apply for more debts until the guarantee is removed
    – All debts must be paid on time for the last 6 months, no exceptions
    – This is a complex application with more work than normal. There would be a $2,500 brokerage fee of which $1,000 would be payable up front. If we cannot get you approved then the full amount would be refunded.

  • Bradley Petty

    hi Could you tell me what deposit % I would need for post code 4674 Rosedale qld

  • Hi Bradley
    This is a high risk location however we have lenders that can consider loans up to 95% of the purchase price including LMI https://www.homeloanexperts.com.au/no-deposit-home-loans/95-percent-home-loan/
    This would mean that you would need a deposit of approx 12% to cover stamp duty, purchasing costs and LMI.
    With a guarantor loan you could buy with no deposit https://www.homeloanexperts.com.au/no-deposit-home-loans/guarantor-loans/

  • Bradley Petty

    Hi question about the wavered LMI ,why is there only a selected occupations that can get this

  • Hi Bradley
    These are occupations that tend to be low risks to the bank and to have higher incomes. Banks are competing for these customers and are willing to offer them specials to attract them. These include doctors, accountants, lawyers, entertainment professionals and professional athletes.
    If you’d like to avoid paying LMI but you aren’t in our Olympic team then you can consider a guarantor loan https://www.homeloanexperts.com.au/guarantor-home-loans/

  • Tacey White

    Hi, I’m looking at buying a property to live in in the small town of Finley, 2713 NSW. It is priced under $100k and I have at the moment 5% deposit and a guarantor if needed. I work full time with approx. $55k income plus non taxable income of approx. $18k and 4 dependants. I comfortably pay $360 a week rent at present. What would be my best step towards purchasing this property? My name is also on a mortgage but will be removed in upcoming months due to separation. Would love to hear your thoughts :)

  • Hi Tracey,
    This is a high risk location and lenders won’t allow you more than 80% of the property value for this location. Luckily, we have few lenders which can accept any location in Australia, please contact them to see if you qualify for a loan. Commonwealth bank accepts this postcode as they’re good with remote areas and a guarantor, you can speak with them for a loan.

  • Seongin Son

    Hi, we are a married couple looking to buy a first home in Ripley QLD, 4306. It’s a brand new home and land package priced at $320K turn-key. Our joint annual income is $60,000 and we have no debts. We have a bank saving of $30,000. I pay child support for one child from my previous marriage but even taking that into account, our monthly expense is still only about $1,700 (except rent). Could you please let us know where we stand?

  • Rachael Kramer

    Hello what size deposit would we need for 2729 or 2653? How long do lenders like you to be at your employer?

  • Hi Rachael,
    Both 2729 and 2653 are high-risk location, that means most lenders will allow you to borrow up to 80% of the property value. However, it depends on the lenders as we have one bank with no restrictions as such and you could buy with less than 5% of the property value. The size of the land/property matters a lot as the banks tend to lend less to land size more than 10 hectares.

    Regarding the length of the employment, banks want you to have stable employment, and complete your probation in your current job. The more you have experience in the same role, it’s better. Call us on 1300 889 743 and find out how much you can borrow in these postcodes.

  • angel hood

    Hi there. If we are looking at a property for 170000 in postcode 4680 and have 10 or 20% deposit but only started work again(fulltime casual) 8 weeks ago after taking a year off to use savings to travel (returned to same job had for years) is this ok?

  • Hi angel,
    If you have joined back on the same job and there’s no probation, then some lenders can consider your home loan application even with a casual job. You just have to have 5-10% genuine savings, a clear credit file and a strong income to service the loan. You can call us on 1300 889 743 and find out which lenders you qualify with.