Home Loan Rate – Australia

What is a Warehouse Conversion?

Old warehouses can often lie unused by businesses and developers often come in, purchase them and then convert them into large, open plan apartments. Once developed they are sold on to the public, often for large sums of money.

They are also known as commercial property conversions or industrial conversions and lenders see them as the same types of buildings when considering a loan application. Therefore in general the same lending policies apply.

Banks can be conservative

There are a number of reasons banks have stricter lending criteria for converted warehouses. These can include but are not limited to;

• Banks see higher risk due to inflated sales price from overzealous marketing.
• Apartments sometimes have unusual and unique designs with limited appeal
• Warehouses are often located in industrial, not residential areas.
• A conversion containing more than 30 units such as those near or within a CBD may be considered a high rise building. This limits the amount you can borrow from some lenders.

Banks, lenders and how much you can borrow

Not all lenders have these policies however and as long as you have a good income coupled with a strong financial position a good Mortgage Broker should be able to find one for you. A broker working with many different lenders is the best option as they would have a far greater chance of finding a lender willing to work with you.

Once a lender is found how much you can borrow depends upon what type of buyer you are and the type of loan you are after. For example an investor can borrow up to 95% of the property value (95%LVR), whilst those looking at a low doc loan can usually only borrow up to 80%.

First home buyers may be eligible for warehouse conversions loans up to 95% however restrictions apply. As is the case for many loan types basic loan discounts and competitive professional packages are available. No matter your situation some lenders also give up to 95% loans on a case by case basis.