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Units On One Title Mortgage

Many professional investors prefer to buy small blocks of units (usually 2, 3, 4 or 5 units) on one title or multiple units in the same complex on separate titles.

There are many types of multiple dwelling complexes including townhouses, houses, villas, semi-detached and fully-detached housing developments, all of which have different lending guidelines and loan types available.

Duplex / dual occupancy

Note: Many LMI (Lender’s Mortgage Insurance) providers restrict lending for duplexes even though they are readily saleable and are excellent security for a loan. We have access to lenders that can consider loans over 80% of the property value.

Up to 4 units / dwellings

  • Investor: 80% of the property value (up to 95% on a case by case basis).
  • Low doc: 60% of the property value (up to 80% on a case by case basis).
  • Construction: 80% of the property value (up to 90% on a case by case basis).
  • Discounts: Competitive professional package and basic loan discounts are available.

Note: Most lenders restrict the amount you can borrow quite significantly to around 70% of the property value. We deal with a few select lenders that can consider lending more on a case by case basis.

Call us on 1300 889 743 or fill in our free assessment form and one of our mortgage brokers will help you to get approved!

Up to 6 units / dwellings

  • Investor: 80% of the property value.
  • Low doc: 60% of the property value (up to 75% on a case by case basis).
  • Construction: 70% of the Gross Realisation (the on completion value) or 80% of the hard costs (land value plus construction costs), whichever is less.
  • Discounts: Competitive professional package and basic loan discounts are available in some cases.

Note: Most lenders restrict the amount you can borrow quite significantly, usually to around 60% of the property value or they will offer you a commercial loan at a higher interest rate.

We can still offer residential loans for this type of security through some of our specialist lenders. You can often pay below the Bank Standard Variable Rate even though many other lenders would charge you commercial interest rates.

Up to 10 units / dwellings

  • Investor: 70% of the property value (up to 80% on a case by case basis for very strong applicants).
  • Low doc: 60% of the property value.
  • Discounts: Competitive professional package and basic loan discounts may be negotiated with the lender for larger loans.

Note: Most lenders restrict the amount you can borrow quite significantly to around 60% of the property value or decline the loan outright. We can consider large loans such as this and at discounted rates below the Bank Standard Variable Rate.

More than 10 units in one block / dwellings

  • Investor: 70% of the property value.
  • Low doc: 60% of the property value.
  • Discounts: We have access to specialised commercial lenders who can consider approving your loan at close to the residential Bank Standard Variable Rate. This is significantly below the cost of a commercial loan from one of the major banks who tend to charge a premium for blocks of units.

Many lenders will assess these properties as developments and will refer you to business banking. You can borrow more than 70% of the property value using a commercial facility with a competitive interest rate.

Call us on 1300 889 743 or complete our free assessment form and one of our mortgage brokers will help you to get approved!

Why residential loans trump commercial loans

The secret to finding the best possible loan is to find a lender to assess your loan as a residential loan and not as a business or commercial facility.

Banks often refer loans for multiple units to their commercial divisions so that they can charge a commercial rate and make more money!

If your loan is assessed as a commercial loan then the amount you can borrow, known as the Loan to Value Ratio (LVR), reduces significantly.

We can’t always get your loan assessed as a residential loan but we’ll always try to find you the cheapest lender for your loan.

Speak with one of our mortgage brokers today by calling 1300 889 743 or complete our free assessment form so we can find you the best deal available from our panel of lenders.

Why are the banks so conservative?

The lenders are conservative when assessing loans secured by multiple dwellings in one location because these properties are a much higher risk to the bank compared to a normal house. Consider how easy it would be to sell one house as opposed to a block of units?

If you have multiple properties spread out over different locations this represents a much lower risk to the bank and can be assessed normally.

Give us a call on 1300 889 743 or fill in our free assessment form and one of our brokers can tell you whether you qualify for a mortgage.

What are some of the risks?

Buying a block of units can come with more risk than you’d normally experience when buying a standard investment property. In particular:

  • Blocks of units in remote locations, such as country towns, may be difficult to sell later on.
  • All units are tenanted which can create trouble as less care is given to the building.
  • If something goes wrong with the property you have all your eggs in one basket.
  • You are heavily rental-reliant so a period of vacancy can cause financial hardship.
  • There are less lenders willing to finance your block, meaning you may not be able to access your equity.

You should consider the risks and your own financial capacity before buying a block. This type of investment is usually best-suited for high net worth individuals with substantial cashflow and funds on standby.

Tips for buying a block of units

Firstly look at why you are buying a block in one line. If you’re seeking a high rental return often you can get the same result by buying a house with a granny flat. You’ll have less risk, easier access to finance and a great rental return.

Try to avoid towns with less than 5,000 people as this reduction in the size of the market can cause the block to be incredibly difficult to sell. You may be waiting years to find a buyer. Larger country towns are usually ok.

The quality of tenant is very important, particularly with larger blocks or blocks with 10 units or more. If all of the units are tenanted, the building can quickly end up becoming run down and can have significant unreported maintenance issues. Buying in a good location and choosing a good property manager is critical to the success of your investment.

If you plan to convert your block to be strata title then make sure you speak to council about the requirements before buying the block. Many blocks need work to meet fire regulations or other rules which make this kind of project unfeasible.

  • Thomas

    I’m planning to buy a duplex with my friend. Will I be able to get the first home owners grant if the property is a newly-built duplex?

  • Hi Thomas,

    Yes you can get the FHOG for a duplex but please note that each applicant should be a natural person, i.e not a company or trust and shouldn’t have received the grant previously. You could refer to our first home owners grant page for more information.
    https://www.homeloanexperts.com.au/home-loan-documents/first-home-owners-grant-guide/

  • Dede

    I want to buy a property in QLD and it’s got 4 units on one title. I earn over $150k a year and the expected rental income from that investment property is $86k. I want to borrow as high LVR as I can get and I want an offset account too.

  • Hey Dede,

    Usually, banks may lend up to 80% for this while there are some that may limit it to 65%. We know a few banks that can lend for multiple units on a single title, however, the key here would be to apply with a lender that can offer you the high LVR that you want. Please call us on 1300 889 743 and one of our expert mortgage brokers will help you find the right lender. You can also enquire online if that’s more convenient:
    https://www.homeloanexperts.com.au/free-quote/

  • Sunderland

    I’m looking to buying a property that has 5 units on one title. The property is worth around $500k-$600k and we’re also looking at a few others. They are all in remote locations in SA. We have a total income of $220k so we should not have a big problem in servicing the loan. Can you help?

  • Hi Sunderland,

    We know a bank that can lend for a property with up to 4 units on one title at 95% LVR and can go with any location. It would be best if you can avoid buying in a very remote location if possible. Going over 4 units will be difficult but not impossible. Please call us on 1300 889 743 to speak with one of our brokers about this.