Mortgage broker East Perth

How lenders read a 6004 address

East Perth sits in one of the denser residential postcodes in the state, and a number of lenders keep internal lists of postcodes where they will lend a smaller proportion of the value. Those lists are not published, they differ from one lender to the next, and they change without notice.

The practical effect is that a deposit which would be comfortable on a house a few kilometres north can come up short on an East Perth apartment. Same borrower, same income, different address.

Minimum internal living area is the other rule that catches people out. Many lenders set a floor, commonly measured off the strata plan and excluding the balcony and the car bay, and the compact one-bedroom stock close to the city is exactly where that floor bites.

• Minimum internal living area, commonly measured excluding balcony and car bay
• Caps on how many loans a single lender will write inside one complex
• A reduced maximum lending ratio in postcodes a lender treats as high density
• Strata levies counted as an ongoing commitment against your borrowing power
• Mortgage insurers applying their own size and postcode rules on top of the lender's

None of this is a reason to avoid East Perth. It is a reason to have the address in front of a broker before an offer goes in, because the answer changes with the lender far more than it changes with the apartment.

Claisebrook Cove, short-stay letting and buying off the plan

Claisebrook Cove was delivered as a planned redevelopment rather than growing street by street, so a large share of East Perth's stock reached the same age at the same time. Buildings from that era are now well into the part of their life where major works start appearing on a general meeting agenda.

Levies matter twice over. A lender counts them as an ongoing commitment when it works out what you can borrow, and a special levy struck after settlement lands entirely on you.

Short-stay letting is the local wrinkle that surprises people, and it is a question about the building rather than about you. Being a walk from the city, the WACA and the Matagarup Bridge across to Optus Stadium means some complexes carry a real volume of nightly and weekly letting. Where a lender decides a building reads as serviced apartments it will commonly lend a smaller proportion of the value, or decline it altogether.

1. 1

   Check the building before you check yourself

   Ask which lenders are comfortable with the complex, the internal areas being sold and how much of it is going to investors. That answer shapes every decision after it.

2. 2

   Treat an indicative approval as a starting position

   A tower under construction outlasts a pre-approval. You will be assessed again near completion, against your circumstances and the policy in force then rather than today's.

3. 3

   Budget for a valuation struck at settlement

   The lender lends against what the finished apartment is worth on the day, not the price on a contract signed years earlier. Any gap between the two is funded in cash by you.

4. 4

   Re-shop the lender before you settle

   Exposure limits inside a single building fill up as it sells, and credit policy moves. The lender that suited at contract is often not the one that suits at completion.

What East Perth clients come to us for

The files here fall into a few repeating shapes. First home buyers getting into a one or two-bedroom apartment within walking distance of work, investors holding a rental near the city, and owners who bought around Claisebrook years ago and are now refinancing or moving up.

There is a steady run of the last group in particular, usually sitting on an investor rate nobody has renegotiated since settlement. Refinancing an East Perth apartment could save you money, though whether it does depends on your current rate, the switching costs and how a new lender views the building.

• Home loans for buyers competing for compact apartments close to the CBD
• Refinancing where the rate on an East Perth apartment has drifted since settlement
• Investment lending assessed on the actual lease, including in short-stay buildings
• Off-the-plan finance for the towers around the Girls School and riverside sites
• Expat home loans where an East Perth apartment has been kept and let from overseas
• Commercial loans for the ground-floor tenancies along Royal Street and Hay Street

The office is on Cambridge Street in West Leederville, which is a short run around the city if you would rather sit across a table from your broker. Plenty of these files never need a meeting at all.