Bore Water Property Home Loan
Will banks lend if my property has only bore water access?
Not all Australian properties have access to town water or even tank water. Find out how lenders assess mortgage applications for properties that only have access to bore water.
How much can I borrow?
If you have a property that uses bore water, most lenders may allow you to borrow up to:
- 80% of the property value if you have access to bore water only.
- 95% of the property value if you also have access to either town water or tank water.
Note that the type of property you’re buying also determines how much you can borrow.
Do you need help to get your home loan approved?
Please call us on 1300 889 743 or complete our free online assessment form and one of our mortgage brokers will help you choose the right lender and loan product for your situation.
Common bore water properties
Vacant land is a common property type that can access bore water. It can be residential, rural residential or rural zoned land with access from an all weather road.
It is a general requirement that the land be connected to the electricity grid or at least within range to be connected without excessive costs.
Most lenders can lend even if there is no access to town water and sewerage services. It will need access to tank or bore water and septic tanks though.
You may be able to borrow more than 80% Loan to Value Ratio (LVR) on a bore water property home loan!
However, you’ll need to have a strong application that won’t be seen as a big risk to the lender.
A lot of rural areas aren’t connected to town water and sewerage. Properties in rural areas generally use bore water or tank water.
If you want to borrow more than 80% on a rural property that uses bore water only, you’ll need to meet strict criteria such as:
- Land size: The land size of your property must not exceed 50 hectares. A larger land size would mean a smaller LVR on your home loan.
- Location: If your property is in a high risk location, you won’t be able to borrow more. You can check out the risk of your property location using the postcode location guide.
- Access: The property will need to have easy access using an all weather road or a dirt road as long as it’s well maintained.
- Services: The property must be connected to the electricity grid or not too far away to incur heavy costs to connect it. Bore water or tank water and septic tanks can be accepted if town water and sewerage services aren’t available.
- Zoning: The land must be zoned rural, rural residential or the equivalent for your state. If the land is zoned industrial, commercial or for farm use, most lenders may not accept it and consider it a commercial farm.
- Land use: The land should be used for personal or investment purposes and not as a farm. If it is a hobby farm then it must not be producing an income.
Eco-friendly properties such as those with solar panels also primarily use bore water or tank water.
Because these properties may be off the grid, lenders will want them to at least be close enough to avoid excessive costs to get them connected.
This is a simple consideration to help make the property more saleable, which lenders are often worried about.
Even if you have access to town water and sewerage services, most lenders will restrict you to borrowing up to 80% of the property value.
How can I increase my borrowing power?
Your borrowing power depends on your income, family size, location, current debts, the type of loan you want as well as the lender that you apply with.
You may be able to improve your borrowing power on a bore water property home loan with some lenders through the following methods:
- Cancel your credit cards: You may have a clean credit file but even simply owning a credit card can have a massive impact on your borrowing power. This is because most credit departments assess your debts based on your credit card limit and not your balance. Cancel your credit cards if you don’t use them or reduce their limit to what you actually use.
- Consider a fixed interest rate: Lenders usually add a buffer of at least 1.5% on top of the standard variable interest rate when assessing your loan application. If you choose a fixed rate then they will assess you with a smaller buffer or even without one. However, note that this applies with only some lenders.
- Consolidate your debts: If you’re refinancing your bore water property home loan, you can consolidate your unsecured debts into your mortgage. These debts often have a higher interest rate and can impact your borrowing power. If you’re buying property, you’ll need to have a large deposit to be able to consolidate your debts into your mortgage.
- Choose the right lender: Each enders assesses your borrowing capacity differently. You need to choose a lender that can accept 100% of your income including overtime or bonus if you receive any. Our mortgage brokers have extensive knowledge of prime lenders as well as non-bank lenders. You can complete our free online assessment form and we’ll help you apply with the right lender.
- Save a deposit: If you have a 20% deposit, you can avoid paying Lenders Mortgage Insurance (LMI), which can amount to several thousands of dollars. Most lenders usually charge LMI if you borrow more than 80% of the property value. A larger deposit would mean a higher borrowing power.
Also note that you may be able to use grants, such as the FHOG, or concessions, such as not paying stamp duty, to improve your borrowing power. This way you may be able to borrow a bit more with some lenders on a bore water property home loan.
Do I qualify for a bore water property home loan?
Does your property access bore water? Your bank not willing to lend you the amount you need?
Our mortgage brokers specialise in specialised and unusual property types and know which lenders have more lenient lending requirements.
You can discuss your personal situation and what features you want on your bore water property home loan with one of our credit specialists by calling us on 1300 889 743 or by enquiring online.