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Student Accommodation Mortgage

What are university apartments?

In and around universities there are specialist buildings zoned and used for student accommodation. These properties are usually quite different from normal units as they often have shared rooms with bunk beds, communal kitchens, shared bathrooms and common study areas.

Student accommodation units are often sold to investors seeking a cheaper property with a higher rental return. Investors in these units often have trouble obtaining finance from their bank because many lenders are reluctant to lend for specialised properties. In other cases students themselves buy their own unit with help from their parents using a guarantor loan.

How much can you borrow?

First home buyer: 70% of the property value.

Investor: 70% of the property value.

Low doc: 60% of the property value.

Discounts: Competitive professional package and basic loan discounts are available for units without restrictive management agreements.

Note: Most lenders decline loans for university apartments no matter how much you borrow. We deal with a select few banks that do consider them acceptable security for a home loan.

Why are the banks so conservative?

Student accommodation obviously does not appeal to the general public and as a result may be more difficult to sell. If there are restrictions placed on the property such as a ban from the owner living in the property or any restrictions on people who are not students living in the block then this may also make the property more difficult to sell.

Banks that specialise in financing these apartments have “acceptable security” lists with their specific guidelines for each block. So if you are buying in UniCentral Griffith in QLD you may be allowed to borrow more or less than someone buying a UniLodge or UniResort apartment.

During university holidays many international students go home and at the end of the year it may be difficult to find new tenants. Because of this some types of accommodation have fluctuating rental incomes. We recommend that you check the management fees and the rental history of units prior to buying them.

The end result is that most banks will not approve home loans or investment loans for student accommodation. The banks that can consider home loans and low doc loans for student accommodation are conservative and restrict the amount you can borrow.

  • Krepe

    I’m planning on investing in one of these. Where can I find the latest investment loan interest rates currently on offer?

  • Hey Krepe,

    Most banks and lender generally don’t publish their best rates but since we have access to a wide range of lenders all over Australia, we have compiled the best investment loan rates currently offered. You can check it out here:
    https://www.homeloanexperts.com.au/investment-loans/investment-loan-rates/

  • Isaiah

    Will I be able to get a low doc loan with just an accountant’s letter?

  • Hi Isaiah,

    Along with an accountant’s letter, most lenders may also want you to provide an income declaration as well as BAS statements or bank statements to verify your income and financial position.

  • Alexis

    I need a $40k personal loan to meet my $60k deposit to buy a university apartment. I earn $160k + co-applicant earns $45k a year so serviceability shouldn’t be an issue.

  • Hey Alexis,

    It may be best to apply for the personal loan with your bank stating that it will be used for purchasing costs instead of saying deposit outright. We can also recommend you to open bank accounts prior to applying so you pass credit scoring. Discuss your situation and loan needs with an expert mortgage broker in detail by calling 1300 889 743.