Hi everyone How much deposit do you need for a commercial property is it 30% or is there a bank doing 20% or lower also when does a loan for a block of units go from a residential loan to a commercial loan
Thanks Rob
I've heard that more than 3 units is usually considered as commercial. Sometimes you might get 4 on a residential depending on the lender.
My understanding is that commercial is almost always 30% at least, but I'm not a broker.
Daedalus
Deposit for commercial is usually 25% – 30%.
Units of 3 – 4+ are usually considered a commercial lend.
However, 80% LVR is possible for strong applicants. Also, strong applicants may finance up to 5 – 6 units as residential loans at residential rates.
Hope that helps.
Chris White | Pillar Property
http://www.pillarproperty.com.au/
Email Me | Phone MeThe Property Investment Specialists
We recently found our bank (ANZ) very bearish, would only lend up to 65% on block of 8 units in large Sydney suburb. Then would only lend up to 60% for renos. Which would have been OK except their 17 month old valuations (they only re-value every 18 months) was very out of date in mining areas.
Didn't make any difference as our offer was not accepted by vendor!
Generally 4+ units considered commercial, we left Westpac as they wouldn't budge on this.
Now we probably recognise the need to be with more than one bank so we will have more options in the future.
for the right commercial property GE Commercial Finance will lend up to 85% with amortisation terms of 25 years
Hi Rob,
There are Commercial Financial Institutions that will finance commercial property with a deposit of between 15%-25%. However, financials will be required to showing servicing of the loan. There is a couple of finance companies who will consider 25% deposit on a Low-Doc basis.
The deposit can be extracted from equity in other property.
I presume the units are already built. If they are on separate titles there are banks that will still write a residential home loan for 4 units. The way to finance more is to split the various units between a number of banks.
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