Join Australia's most dynamic and respected property investment community

Banks not financing under 50m2?

Discussion in 'General Property Chat' started by Health4wealth, 20th Jan, 2016.

  1. Health4wealth

    Health4wealth Member

    Joined:
    1st Jul, 2015
    Posts:
    17
    Location:
    Country NSW
    Hi I was recently speaking with an agent in North Brissy and according to him banks wont cover a floor space of less than 50m2.

    Its a fairly open ended statement and I'm sure if you looked hard enough you get finance from someone (Loan shark :eek:) hehe

    Just wondering what peoples thoughts and experiences are on the matter :)
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,593
    Location:
    Sydney or NSW or Australia
    Haven't done so since Noah was a lad.

    Hasn't come up on PC but often raised on the old SS forum.
     
  3. Redom

    Redom Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    864
    Location:
    Sydney (West) and Canberra
    Haha agents giving finance advice. You won't have to look to hard, no need to go to loan sharks unless you like to live a little dangerously. Walk into the country's larger bank (CBA) if living area is above 40sqm. :)

    Hmm its more like 35-40 sqm where you have fewer options now - plenty of options available above 40sqm. Studios can be tricky with lower LVRs too.

    NAB have a 50sqm rule (including all internal, external, garage, etc). But if the deals strong enough and the LVRs sub 80, you can do it below that mark too.
     
    Inov8ive likes this.
  4. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,785
    Location:
    Perth WA
    Some will, they all have different criteria. CBA will do 40m2.

    Ha - @Redom beat me too it :)
     
  5. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,162
    Location:
    Canberra and Sydney
    Can still finance sub 50m2 - depends on the parameters of the deal (LVR in particular).

    Cheers

    Jamie
     
  6. Redwood

    Redwood Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    342
    Location:
    Melbourne
    As mentioned - yes you can....options in big 4 also non-bank lenders.

    Cheers Ivan
     
  7. Davothegreat

    Davothegreat Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    253
    Location:
    Sydney
    Anyone seen the new Andrew Winter show about people buying "Tiny Houses"? I find it interesting to see that most of these people seem to be broke otherwise they wouldn't be buying the places they're looking at yet we know no bank will finance a place that's so small - circa 30sqm in some cases. I don't get it. If you can only afford 100k or whatever but you can't finance it that means you've got cash so why not buy a normal place?
     
  8. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,110
    Location:
    Melbourne, Nationwide
    The smallest appartment I've financed was 22 sqm at 80% LVR.

    Less than 50 sqm will restrict your options but finance is still readily available. Below 40 sqm is where things get fairly tricky.
     
  9. Angel

    Angel Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    1,296
    Location:
    Paradise, Brisbane
    Is that an OZ or US show? I've been watching the US show this week and the people want to live mortgage free and often "sustainable" lifestyles.
     
  10. Inov8ive

    Inov8ive Well-Known Member

    Joined:
    17th Jul, 2015
    Posts:
    484
    Location:
    Sydney
    Pretty much no bank will finance if the TOTAL space is under 50m2 (incl car balcony etc). And then generally the internal floor space needs to be at least 40m2
     
  11. Inov8ive

    Inov8ive Well-Known Member

    Joined:
    17th Jul, 2015
    Posts:
    484
    Location:
    Sydney
  12. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,173
    Location:
    Adelaide, SA
    People spout garbage which isn't true all the time about lenders policy requirements - not difficult at all to lend in the 40-50sqm space - below that it just comes down to LVR.
     
  13. Davothegreat

    Davothegreat Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    253
    Location:
    Sydney
    Oz show, I didn't know there was a US version of it. Started a couple of weeks ago.
     
  14. euro73

    euro73 Well-Known Member Business Member

    Joined:
    18th Jun, 2015
    Posts:
    1,450
    Location:
    Sydney
    What they said... ^^^^^^^^^ sub 50M2 is relatively straightforward :)
     
  15. Health4wealth

    Health4wealth Member

    Joined:
    1st Jul, 2015
    Posts:
    17
    Location:
    Country NSW
    Wow that's grey if ive ever seen ito_O
     
  16. Inov8ive

    Inov8ive Well-Known Member

    Joined:
    17th Jul, 2015
    Posts:
    484
    Location:
    Sydney
    Some people do not know what they are talking about. It is easy to get finance for a unit that is between 40 & 50m2 ofcourse as long as it has a car space or is over 50m2 on title. I have had brokers who didnt actually quite understand this so the responses do not suprise me. Some reading here Units less than 50m2
     
  17. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,173
    Location:
    Adelaide, SA
    Doesn't even need to have a car space or balcony included into calculations - those lenders which take the lower limits specifically exclude utilising car space/balcony into the sqm calculations.

    Have a 90% LVR 40sqm apartment with no car space settling today - nice simple transaction.
     
    ppv and Jess Peletier like this.
  18. Inov8ive

    Inov8ive Well-Known Member

    Joined:
    17th Jul, 2015
    Posts:
    484
    Location:
    Sydney
    Fair enough, I have tried numerous times with no joy. My broker just told me that the location of the dwelling is also taken into account. If its in a location with lots of apartments it will be very hard for a smaller apartment. Which lender did you use?
     
  19. Redwood

    Redwood Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    342
    Location:
    Melbourne
    Inov8ive - please listen to these guys, there are options for any type of apt and size and yes, it will restrict the choice/ pool of lenders however there is a lender for everyone, no matter the size of apartment or whether car park is attached it can be financed, usually outside the big 4 with non bank lenders. Corey mentioned his we had 29 sqm this week with a non bank lender - no problem and no car park.

    Cheers Ivan
     
  20. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    2,458
    Location:
    Sydney & Gold Coast
    In regards to "small" apartments, I believe in most cases the location is more to do with the appropriateness of a cosy apartment in the location. Near Sydney CBD, no sweat. In Gundagai, not so likely.
     
    Inov8ive likes this.