Thinking about city living and the convenience of apartment life?
Apartments can be great if you want less maintenance or love being close to the action.
But buying an apartment isn’t exactly the same as buying a house—there are some key differences to know about when it comes to borrowing.
Standard vs Non-Standard Apartments
Banks usually split apartments into two groups: Standard and Non-Standard.
While definitions vary a bit between lenders, here’s the general idea:
Standard apartments:
- Must be at least 38sqm (excluding balconies)
- Have either freehold or stratum in freehold ownership
If your apartment fits this, banks will typically lend up to 80% of the property’s value for owner-occupiers—meaning you need a 20% deposit. High LVR lending (over 80%) for apartments isn’t available at the moment with major banks. For investment apartments, usual LVR limits apply (around 65% for existing, up to 80% for new builds).
Non-Standard apartments might include:
- Smaller than 38sqm
- Built specifically for student accommodation
- Serviced apartments
- Leasehold properties
- Dual-key units (more than one apartment on one title)
- Apartments without a separate bedroom
With non-standard apartments, max lending can drop significantly, sometimes as low as 50%, and banks may apply stricter lending rules.
Other things to consider
Apartments come with body corporate fees—ongoing costs for managing and maintaining the building. Banks count these fees as an expense when assessing your borrowing power, so it’s important to factor them in when planning your budget.
Sometimes banks have already lent heavily on a particular apartment block and won’t lend more there, meaning you might need to approach a different lender. That’s where working with a mortgage adviser pays off—they can shop around multiple lenders without you needing to apply more than once.
If you want to chat more about financing an apartment, just get in touch!
