Refinance / Restructuring
How Do Property Purchase Loans Work?
5 min read- Finance Guide
- Updated 2026
Quick answer
Lenders typically fund up to
80% LVR
Without lenders mortgage insurance
- Pre-approval validity ~3 months
- Settlement timeframe 30-90 days
- Max loan term Up to 30 years
1300 421 044
1300 421 044
Detailed explained
Property purchase finance is designed to fund the acquisition of a home, investment property or other eligible residential real estate. The lender advances funds at settlement, takes a mortgage over the property, and you repay the loan over an agreed term — commonly up to 30 years.
Deposite and loan structure
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You usually pay a deposit from savings, equity, gifted funds accepted by the lender, or a combination of these
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The lender funds the remaining balance up to its approved loan to value ratio
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A lower LVR generally improves approval chances and can reduce costs
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Many borrowers aim for 80% LVR or lower to avoid LMI — although some lenders can go higher subject to policy
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LVR SNAPSHOT
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Lender funds
up to 80%
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Your deposit
from 20%
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-
Above 80% LVR
Lenders mortgage insurance (LMI) may apply
How the approval process works
Pre-Approval
01
Identify the commercial property the company intends to purchase
Property
02
Once you find a property, the lender assesses the contract and the property details
Valuation
03
The lender may order a valuation to confirm the property supports the loan
Settlement
04
Formal approval is issued once income, liabilities, living expenses and security are acceptable
What lenders look at
Income
Income from wages, self employment or other acceptable sources
Existing debts
Existing debts such as credit cards, personal loans and other mortgages
Living expenses and dependants
Ongoing costs assessed against repayment capacity
Deposite or equity position
Cash savings, equity from existing assets, or gifted funds
Credit conduct and repayment history
Credit file reviewed for defaults, conduct, and patterns
Property type, condition and location
Affects acceptable LVR and which lenders will consider the deal
APRA DTI limit — from February 2026
APRA now limits high debt-to-income mortgage lending at 6 times income or more to 20% of new lending for authorised deposit-taking institutions
Need Help with your Project?
From contract to settlement
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01. After formal approval, you sign loan documents and meet any remaining conditions
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02. Your solicitor or conveyancer works with the lender on settlement
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03. On settlement day, the lender provides funds, ownership transfers, and the mortgage is registered
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03. Settlement commonly occurs around 30 to 90 days after the contract is signed, although shorter or longer periods can be negotiated
Common problems
Property purchase loans are straightforward when the borrower, property and timeline all fit lender policy. Problems usually arise when the deposit is thin, the property is unusual, or the paperwork is incomplete
Low Deposit
If the deposit is too small, the LVR may be higher than the lender is comfortable with or LMI may apply.
Possible solutions include:
Reduce the loan amount- Use equity from another property if available
- Consider a guarantor structure where appropriate
- Choose a lender that accepts higher LVR deals subject to policy
Credit or servicing issues
A loan can be declined if income does not clearly support repayments or if the credit file shows issues.
Possible solutions include:
- Repay or reduce short term debts
- Correct credit file errors before applying
- Provide clearer evidence of income and financial conduct
- Restructure the deal to a lower loan amount
Property issues
ISome properties are harder to finance because of location, size, condition, zoning or valuation shortfalls.
Possible solutions include:
- Obtain a realistic assessment of value early
- Use a larger deposit if valuation comes in low
- Select a lender suited to the property type
- Renegotiate the purchase price if needed
Steps to get Finance
Step
01
Work out your budget, deposit and likely borrowing range.
Step
02
Get pre approval or an early borrowing assessment.
Step
03
Find a property and review the contract before signing.
Step
04
Submit the full application with supporting documents.
Step
05
Complete valuation, approval and loan documents.
Step
06
Proceed to settlement and take ownership of the property.
Speak with a Property Finance Specialist
Property development finance can vary significantly depending on the project size, location, approvals, and the developer's experience.
A specialist can review your project and help determine which lenders may be able to fund it.
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