How much can you borrow?

Serviced apartments are normal apartments that are leased out for short term stays.

What sets them apart from normal units is that there is usually a management agreement in place, a pooled rental scheme or restrictions on the use of the unit as an owner occupied home.

  • Apartment is in a block with serviced apartments: 90% of the property value on a case by case basis. This is only available if the unit is not being used as a serviced apartment but is in a block where most of the apartments are serviced.

  • Apartment can be released from management agreement: 80% of the property value. The management agreement must allow for the serviced apartment to be released from the agreement within a maximum of 6 months and with few, if any, fees to do so.

  • Apartment has a restrictive management agreement: 70% of the property value on a case by case basis. Please call us and give us the address and we can then check to see which of our lenders can accept your apartment as security for a loan.

  • Resort style / Part of a resort: 60% to 70% of the property value. Please call us and give us the address and we can then check to see which of our lenders can accept your apartment as security for a loan.

  • Serviced apartment low doc loan: 70% of the property value. Applies to serviced apartments in a metro/city location and a good development. The management agreement must allow for the serviced apartment to be released from the agreement within a maximum of 6 months and with few, if any, fees to do so.

  • Discounts: Competitive professional package and basic loan discounts are available in most cases.

  • Guarantor solution: By choosing the right lender and with a guarantor to secure your mortgage, you may actually be able to borrow up to 105% of the property value!

  • First home buyer: Not applicable.

Note: First home buyers cannot get a loan for serviced apartments because serviced apartments are always used as an investment property. Lenders do not include the furniture package as being part of the property value, so please deduct the value of any furniture before calculating how much our lenders can offer you.

Extra rules for serviced apartments

To borrow 80% the serviced apartment must meet the following criteria:

  • Permanent occupancy of the property must be permitted (i.e. there are no restrictions on permanent occupancy of the property under the management agreement or under local zoning restrictions.
  • An “Alternative Use” valuation (i.e. a valuation undertaken on the basis that the unit is not a serviced apartment) provides support and is to exclude the value of furniture, fittings and equipment.
  • The property is not a hotel/motel type of apartment.
  • The property can be removed from the letting pool (where applicable) within a maximum term of six months from the giving of such release notice. Where this involves the payment of a fee or penalty in any form, the fee/penalty is to be deducted from the valuation.
  • Rental income utilised as the basis for servicing/repayment calculations reflects that considered achievable in the ‘Alternative Use’ valuation.

To borrow 70% the serviced apartment must meet the following criteria:

  • Property must be >50m2 internally (excluding car spaces and balconies).
  • Prior approval from the lender must be given to each complex. Call us with the address as in most cases this has already been obtained.
  • Valuation as a serviced apartment.
  • Your serviceability (ability to repay the loan) must be very strong.
  • Rental income is assessed at only 60% of actual rental being received.

We can help you to borrow 80% or 70% depending on the type of apartment you are buying. Please enquire online to discuss your situation with one of our mortgage brokers.

Why are the banks so conservative?

Banks have been burnt in the past by poorly run serviced apartments that did not return the promised rental yields and were difficult to sell because of the restrictions put in place by the management agreement.

Typically, the entire block is leased through the one managing agent who operates the block like a small hotel and pools the rent to then be distributed to the owners.

When applying for a home loan you will need to prove to the bank that your apartment does not represent a higher risk than other apartments or will need to have a larger deposit.

  • Tina

    Can I buy a serviced apartment as an place of residence; it’s mentioned a serviced apartment is always used as an Investment property, is it the case?

  • Hi Tina, most serviced apartments are zoned as commercial properties and usually the owner is not allowed to live in it for more than two weeks at one time. It should be used as an investment property.

  • downie

    I want to buy a serviced apartment and need a mortgage to help finance its purchase. Can I use my FHOG as a deposit?

  • Hi downie,

    Serviced apartment loans aren’t available for first home buyers, however, you can use your FHOG as part of your home loan deposit for a loan to buy any other residential property. Note that it likely won’t be enough on its own though.

  • Killua

    The serviced apartment I’m buying is 43m2 in size and I’m in a strong position to buy it but I’ll still need to borrow at least 70% LVR. Will size be an issue here? Because I think that’s what delayed the loan for a friend of mine.

  • Hey Killua,

    To borrow 70% the serviced apartment the property size must generally be larger than 50m2 internally (excluding car spaces and balconies) so please call 1300 889 743 to discuss with an expert mortgage broker on what deal can be available or find out what alternative options can be considered.

  • Nina H

    Would it be better to borrow to my max limit or is it better to go a bit lower?

  • Hi Nina,

    In most cases, it doesn’t make sense to borrow to your limit. If there’s any unexpected financial or personal crisis, you may not be able to recover. Having a healthy cashflow as well as some funds on standby will help you to ride out many of the small problems in life. You should look ahead and borrow a suitable amount for your future income and expenses. It’s usually okay to borrow closer to your limit if you are at the beginning of your career, have a regularly increasing income and are not planning to have children right away. This can allow you to buy the home that will suit you for many years to come without requiring you to sell and buy a new property in a few years time.

  • Simon

    I bought a serviced apartment as an investment property and would like to know if the Home Loan Experts have any info on applying for an income tax withholding variation..

  • Hey Simon,
    Yes, we do. You can check out the PAYG income tax withholding variation page to find the necessary info. Here’s the link to the page:

  • MetalPetal

    I have recently inherited some money and would like to invest it in property. I know that getting buy-to-let mortgages isn’t a viable option anymore so what advice can you give in terms of the type of mortgage I would need if I purchase a flat/apartment to turn into a serviced apartment? I already have a mortgage with my husband on our main residence.

  • Hi MP
    You generally can’t turn a single unit into a serviced apartment. You tend to buy a unit in a serviced apartment block. I think you mean to rent it out fully furnished on a short term basis but to do it yourself?
    For Australia you can get an investment loan if it’s an investment and that is fine as long as you meet the criteria. Other countries like the UK or NZ have big restrictions on investment loans.
    We’d be able to use the equity in your home to assist you to buy an investment property.

  • MetalPetal

    Whoops I should have realised this site was Australian! I’m based in the UK Thanks anyway

  • No worries mate.

  • Raheleh Dalvand

    I wanted to know if I buy a serviced apartment , can I manage it by myself and give it rent to my mom when she come to visit us ?

  • Hi Raheleh,
    You can rent it out to your mom however the rental income from your mom won’t be used while assessing your borrowing power unless there’s a specific contract between you two. And most of the times, there’s a management agreement for such serviced apartments.

  • Smokey

    How much of a deposit do I need for a serviced apartment? Are there any exceptions to the rule?

  • We find that many studio apartments are around 35m2. So if there is a car space and balcony this takes the total area over 50m2 which means we can lend 95%! So a 5-10% deposit is all that’s needed.
    Whereas, if there is no car space or balcony, we can lend a maximum of 80%, so you need a 20-25% deposit.
    Hope this helps!

  • Peter Krstevski

    Finding it hard with any lender to borrow against a holiday let resort unit on the Gold Coast. Are you able to help with this? Secondly we need a lender who will accept income from the property for serviceability. Thank you.

  • Hi Peter,
    Yes, we can help you with lender options. Most lenders will typically use 80% of the rental income from the property for serviceability. We would need to do a full assessment to provide you with our recommendation of lenders. Please speak with one of our specialist mortgage brokers by giving us a call on 1300 889 473 or by filling in our online enquiry form: