Residential loan departments of most banks simply don’t understand how hybrid trusts work! Others have stricter guidelines due to Australian Taxation Office (ATO) rulings.

Can you still get approval for a loan?

How much can you borrow?

We can help you to borrow:

  • Investment loans: 95% of the property value.
  • Low doc (no income evidence): 80% of the property value on a case by case basis.
  • Discounts: Competitive professional package and basic loan discounts are available.

Low doc hybrid trust loans are only available from a few lenders. Please discuss this with us before you begin looking to buy a property.

Some lenders have restrictions on lending to hybrid trusts with a company as the trustee, but can accept trusts with a personal trustee.

Please contact us on 1300 889 743 or enquire online and one of our mortgage brokers will call you to discuss your situation.

Why do most banks refrain from lending to hybrid trusts?

Apart from having a very minimalistic understanding of the structure of hybrid trusts, many banks simply follow the recommendations and rulings of the ATO.

These private ATO rulings disagree with the way that hybrid trusts are used to minimise tax when investing. In other words, the ATO is looking at the “Uncommercial Use of Trusts”.

Because of this uncertainty, many banks refuse to approve mortgages for hybrid trusts.

Which lenders will approve my loan?

Some banks do lend to hybrid trusts, however the choices are limited.

The secret to getting a loan with a low interest rate is to find a lender that will approve your mortgage as a residential loan rather than sending your application to business banking.

As a mortgage broker that specialises in lending to trusts, we can find a lender for you and set up your loan with the structure recommended by your accountant.

What is a hybrid trust?

A hybrid trust has a mixture of features from a discretionary trust (or family trust) and a unit trust.

The result of this combination is a trust that has the best of both worlds.

There are several types of hybrid trusts including hybrid unit trusts and hybrid discretionary trusts, with the latter being more common.

Although, there is a large degree of variation between different trust structures, most hybrid trusts issue special units and have the discretion to distribute income to beneficiaries and special unit holders.

Seek professional advice

We strongly recommend that you talk to your accountant before setting up a hybrid trust or using your trust to borrow money.

Trusts are very complex and there are a range of legal matters involved. Getting the right information will help you make an informed decision.

Apply for a hybrid trust loan today!

Want to make sure that you are able to borrow the maximum LVR? We can help you apply with a lender that understands trust loans and offers attractive interest rates and minimal fees.

Speak to us today on 1300 889 743 or enquire online and one of our specialist mortgage brokers will call you to help you get fast approval.

  • R, Nora

    Hi, I’ve been having a few issues with my trust, do you guys have a broker who specialises in trust mortgages that I can discuss this with?

  • Hey R Nora,

    Yes, we do have mortgage brokers who specialise in trust mortgages but please note that we can’t give you any financial advise or help you with the trust issues itself. However, we can help you deal with any mortgage issues you may be facing while trying to use your trust to get finance. You can call us on 1300 889 743 and ask for a trust mortgage specialist and discuss it directly.

  • clutterbuck

    Being able to borrow up to 95% on an investment loan is great but there’s still a lot I don’t know as this will be my first IP. Can you please direct me to a bunch of resources and guides that I can check out before I move on to making a decision?

  • Hello clutterbuck,

    Finding accurate and up to date information can be a huge challenge for property investors, especially if you’re just starting out. We’ve put together a comprehensive list of resources that you can use to educate yourself on investment loans and how to buy an investment property, which you can check out here:

  • O’Shane

    Can we use old tax returns or interim financial statements to help verify income for a low doc loan?

  • Hi, yes you can use old tax returns (over 24 months) as well as interim financial statements to verify your income. Additionally, you can use 12 months’ BAS statements, an accountant’s letter and business bank statements too.

  • Luna

    When would evidence of building insurance be required?

  • Hello Luna,
    The requirement for building insurance varies between the property type and purpose of the loan. For purchase/refinance, you need to obtain building insurance and provide evidence. However, for unit / townhouse, the strata corporation insures the building so no evidence is required. Insurance is not required for vacant land too, obviously.

  • Howard J

    How long does a normal preapproval last?

  • Hi Howard,
    Pre-approvals are usually valid from between three to six months. If your pre-approval expires before you find a property then we can apply for an extension.