Running the numbers on apartment financing
A recent survey of main mortgage lenders shows a wide variation in what they'll lend for apartments.
Monday, July 5th 1999, 12:00AM
by Paul McBeth
Look well before you leap when buying an apartment, because your bank may lend a lot less than you're counting on.
That's the message that comes through from a survey of the main mortgage lenders, which shows a wide variation in what they'll shell out for apartments (see Mortgage lending thresholds).
The survey by Bayleys Research shows that some lenders are only prepared to hand over a mere 50 per cent of a property's valuation or purchase price, whichever is lower. For owner-occupied apartments, banks are generally willing to lend between 50 per cent and 90 per cent, but for investment properties, the range is 50-80 per cent and for serviced apartments it's 50-75 per cent.
However, Bayleys says the criteria for debt servicing is usually the same as for any residential lending. It says that most banks will lend up to 30-40 per cent of gross income and may even go higher in some instances, as this type of lending is generally assessed on a case-by-case basis.
Mortgage lending thresholds
|
Mortgage lender |
Owner-occupied |
Investment |
Serviced |
|
Countrywide |
80% |
75% |
75% |
|
TSB Bank |
75% |
80% |
80% |
|
WestpacTrust |
90% |
50% |
65% |
|
National Bank |
70% |
80% |
50% |
|
ANZ |
90% |
50% |
60% |
|
ASB Bank |
50% |
50% |
50% |
|
BNZ |
50% |
50% |
50% |
Source: Bayleys Research