Mortgage broker Victoria Park

Big old blocks, and building more than one house on them

A lot of Victoria Park's older housing sits on blocks zoned for considerably more than one dwelling. That is why so many single houses have quietly become two, three or four.

Once a project passes two dwellings, most lenders stop calling it a construction loan and start calling it development. The assessment changes, the deposit requirement rises and the lender panel narrows.

The costs people leave out are the ones between the plan and the build. Survey, demolition, service headworks, contributions and holding costs while nothing is earning.

Apartments along Albany Highway

The apartment stock along and behind the Albany Highway strip is newer, denser and popular with investors. Lenders apply the same caution they apply to any high-density corridor.

Minimum internal size, limits on how many loans one lender holds in a complex, and reduced lending ratios in some postcodes are the usual constraints. They vary by lender and change without notice.

• Internal living area measured without the balcony or the car bay
• The number of loans the lender already holds in that building
• Strata levies, which count against your borrowing power
• Rental income assessed on the signed lease, not the marketing estimate
• Whether the unit is a standard apartment or serviced, which changes everything

Serviced and student-style apartments deserve their own warning. Many lenders will not touch them, and those that will often lend a much smaller proportion of the value.

Investors, the rental market and mixed-use

The university, the hospital precincts across the river and the stadium end of the suburb all support tenant demand. That is why investment lending is the bulk of our Victoria Park work.

Investment loans get assessed on the signed lease rather than on the rent an agent thinks is achievable. Lenders also apply their own buffer to your repayments, which is why borrowing power differs so much between them on the same file.

The Albany Highway shopfronts add a commercial layer. Owner-occupiers buying their own premises and investors buying tenanted retail both come through, and both are commercial loans rather than home loans.

• Home loans for owner-occupiers buying into the older housing stock
• Construction finance to retain and build at the rear
• Development finance for grouped dwellings on a subdivided block
• Investment lending on apartments and houses, assessed on the lease
• Commercial loans for Albany Highway shopfronts and mixed-use buildings