Running the numbers on apartment financing
Look well before you leap when buying an apartment, because your bank may lend a lot less than you're counting on.
That's the message that comes through from a survey of the main mortgage lenders, which shows a wide variation in what they'll shell out for apartments (see Mortgage lending thresholds).
The survey by Bayleys Research shows that some lenders are only prepared to hand over a mere 50 per cent of a property's valuation or purchase price, whichever is lower. For owner-occupied apartments, banks are generally willing to lend between 50 per cent and 90 per cent, but for investment properties, the range is 50-80 per cent and for serviced apartments it's 50-75 per cent.
However, Bayleys says the criteria for debt servicing is usually the same as for any residential lending. It says that most banks will lend up to 30-40 per cent of gross income and may even go higher in some instances, as this type of lending is generally assessed on a case-by-case basis.
Mortgage lending thresholds
| Mortgage lender | Owner-occupied | Investment | Serviced |
| Countrywide | 80% | 75% | 75% |
| TSB Bank | 75% | 80% | 80% |
| WestpacTrust | 90% | 50% | 65% |
| National Bank | 70% | 80% | 50% |
| ANZ | 90% | 50% | 60% |
| ASB Bank | 50% | 50% | 50% |
| BNZ | 50% | 50% | 50% |