Property Purchase Loans
What Security Is Required For Property Loans?
5 min read- Finance Guide
- Updated 2026
Quick answer
Most property loans are secured by
1 PROPERTY
Used as the main loan security
- Main security Property being bought
- Extra security If policy requires
- Valuation role Confirms security value
1300 421 044
1300 421 044
Detailed explained
Security is what protects the lender if a property loan is not repaid. In a standard property purchase loan, the lender usually relies on the property being purchased as the main security, documented through a mortgage. Depending on the loan size, borrower profile, and property risk, the lender may also look at extra security, guarantees, or stronger equity support.
Security and loan structure
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The security for most property purchase loans is the real estate being bought, with the lender taking a mortgage over that property
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The lender assesses the property's value, condition, location, title, and saleability before deciding whether it is acceptable security
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If the loan is more highly geared or the transaction is more complex, the lender may ask for additional security or a guarantor supported by property or cash
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Security value matters because the lender compares the loan amount against the assessed property value, not just the contract price
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SECURITY SNAPSHOT
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Main security
Property purchased
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Extra support
Only if required
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Valuation matters
If the valuation is lower than expected, the lender may reduce the loan or ask for more security
How security is assessed
Pre-Approval
01
You submit the property details, borrower information, and proposed loan structure
Property
02
The lender reviews the property itself as security, including title, contract, location, and overall suitability
Valuation
03
A valuation is commonly ordered to confirm the market value supporting the proposed loan amount
Settlement
04
Approval proceeds once the lender is satisfied with both servicing and the strength of the proposed security
What lenders look at in security
Property value
The lender compares the loan amount against the valuation, not just the purchase price
Title and legal position
The lender checks whether the property can be mortgaged cleanly and whether anything affects security
Property type and marketability
Standard, readily saleable properties are usually easier security than unusual or specialised ones
Equity contribution
Your deposit or existing equity affects how much the lender must rely on the property as security
Additional security
Another property, cash backed support, or guarantor arrangements may be considered where policy allows
Valuation quality
Lenders rely on professional valuation methods because the security value underpins the approval decision
Security valuation is not just a formality
APRA expects sound residential mortgage lending practices to include appropriate security valuation methods for property used as collateral
Need Help with your Project?
From security review to settlement
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01. Once approval is issued, you sign the loan documents and the mortgage or security documents required for settlement
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02. Your solicitor or conveyancer works with the lender so the security is correctly documented for settlement
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03. On settlement day, the lender advances funds, ownership transfers, and the mortgage is registered against the property
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04. If extra security or a guarantor is involved, those documents usually need to be completed before settlement can proceed
Common problems
Security issues can delay or weaken a property loan even where income looks strong. Problems usually arise when the valuation is short, the property is hard to sell, title issues appear, or extra security is needed and not available.
Valuation shortfall
If the valuation comes in below the purchase price, the property may not support the loan amount you expected.
Possible solutions include:
Increase the cash contribution- Use equity from another property if available
- Review whether a guarantor option is suitable
- Renegotiate the purchase price where possible
Unacceptable security property
Some properties are harder to use as security because of condition, location, title concerns, or limited resale appeal.
Possible solutions include:
- Get the property assessed early
- Choose a lender suited to the property type
- Use a stronger deposit or lower leverage
- Have legal issues reviewed before settlement
Additional security complications
If the lender asks for extra security, the deal can become more complex and may require more documents, advice, and coordination.
Possible solutions include:
- Confirm early whether extra security is actually needed
- Check whether equity in another property is available
- Allow time for guarantor documentation if used
- Keep the structure as simple as possible
Steps to get Finance
Step
01
Identify the property and estimate how much security support the loan will need.
Step
02
Get early guidance on whether the purchased property alone should be enough security.
Step
03
Check the property type, title, and likely valuation risk before committing.
Step
04
Submit the full application with all property, borrower, and security details.
Step
05
Complete the valuation, approval, and any mortgage or guarantee documents.
Step
06
Proceed to settlement once the lender is satisfied the security is in place.
Speak with a Property Finance Specialist
Security requirements can change depending on the property, the loan size, your deposit or equity position, and whether the lender needs extra support beyond the property being purchased.
A specialist can review the property and the proposed structure to help identify which lenders may accept the security available.
Speak with a finance specialist about the security required for your property loan
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