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Property Lending Ratios

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What you need to know about Property Lending Ratios.

Generally banks will lend to 80% of the purchase price of value of the property.

Lenders will in fact lend more than 80% of the purchase price or value, and in fact up to 95%, but when lending above 80% the lender will insure the loan against potential loss.  You, the borrower will pay the insurance premium on behalf of the lender.  This insurance premium can run into many thousands of dollars.

The location of the lenders security has a huge bearing as to what the lender will lend to.  The lender will scale back the 80% (no mortgage insurance) or the 98% (mortgage insurance) on the following property types, i.e.

  • Dwellings less than 40m²
  • Rural or regional property
  • Vast acreage
  • Inner City apartments within large apartment blocks
  • Vacant land
  • Heritage listed properties

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