Not all mixed use properties are the same!
Properties are assessed as either being mixed residential and commercial, industrial and residential, or rural and residential.
Getting a mixed use property loan will depend on how your property is defined by the lender.
How much can I borrow?
- If the property can be used as a home: If the property is a normal house and the zoning allows the property to be converted back for residential use, then you may be able to borrow up to 90% of the property value.
- If you rent out the attached residence: You can borrow up to 80% of the property value with a commercial loan.
- If you live in the attached residence: You can borrow up to 75% of the property value with a special type of commercial loan.
- If you use the property for your business: You can borrow up to 75% of the property value, depending on the strength of your business financials.
Ultimately, you must meet all standard bank criteria regarding affordability and asset position but your loan will be priced using a commercial risk matrix.
Do you need help financing your property?
Call us on 1300 889 743 or complete our free assessment form and one of our mortgage brokers will let you know your options.
How do banks view mixed commercial & residential properties?
Many older commercial buildings have residences attached to them.
The most common example is a shop front on a major road which also has an apartment upstairs for the owners to live in.
The problem is that this type of property is often owner-occupied.
Banks prefer commercial properties to be leased out because if the tenant gets into financial trouble, the landlord can usually afford the loan, or vice versa.
In addition to this, many business owners do not want to live at their workplace so these properties may not be in high demand when being sold or leased.
What do the banks assess?
There are a number of factors that banks and lenders look at to determine your eligibility for a commercial loan:
- The location of the property.
- Your personal income and financial position.
- The strength of the tenant and length of the lease.
- The yield and cap rate.
- The bank valuers’ recommendations.
Do you qualify for a mortgage to buy a mixed use property?
Please call us on 1300 889 743 or complete our free assessment form to find out how we can help you.
Commercial loans versus residential loans
Real estate that has a mixed purpose does not always fall under commercial lending.
Rural and residential mixed use property can often be bought with a residential home loan from a number of our lenders.
Some of our lenders will accept land up to 50 hectares and offer residential rates.
Most lenders will assess properties that have commercial elements such as retail, office space, industrial or manufacturing as commercial properties.
However, if the property is a converted terrace, it may still be used as a residential property.
In these cases, we may be able to help you to obtain a residential loan.
A residential loan has a lower rate, lower fees and a longer term than a commercial loan.
Our brokers are experienced with both commercial and residential loans.
We’re able to assess your situation and determine which type of loan will best suit your needs.
Call us on 1300 889 743 or complete our free assessment form to see how we can help you.
Does real estate zoning affect how much I can borrow?
Mixed use zoning may enable you to borrow slightly more if the property can be used 100% as a residential home.
However, all other zoning types will not affect the valuation and borrowing capacity unless they in some way prevent the property from being used to its full potential.
What types of properties are considered ‘mixed use’?
Retail properties with an apartment upstairs are the most common type of mixed property.
Converted terrace houses that are now used as offices or as a retail showroom can also fit into this category.
However, there are many converted warehouses that are used as creative spaces with a residence within them. In most cases, these properties have exposure on a main road and rear lane access which makes them suitable for a resident and a business.
Call us on 1300 889 743 or complete our free assessment form and one of our specialist brokers will be able to assist you.
What financial documents will I need?
The documents you require will depend on the purpose of the real estate being purchased.
If you’re planning to use the property as an investment then you’ll need to prove that a current lease is in place and other evidence of the rent that is being generated.
For an owner-occupied property, you’ll need to provide financials for your business or other evidence that it is trading profitably.
If you have your own PAYG job then the income from that job is also taken into account if you provide payslips.
How can I get my loan approved?
Our mortgage brokers are experts in getting mixed use property loans approved. We can assess your situation and determine the best way to represent it to the lenders.
We can assess each mixed property on its own merits. If the zoning isn’t going to change, or the property’s purpose isn’t going to change, then we’ll have to match it up to the right lender.
As mortgage brokers, we can determine which lender will be best suited for your security property.
Call us today on 1300 889 743 or complete our free assessment form to find out how we can help you.