Apartment or House? What You Need to Know About Financing Each Option
Thinking about buying a trendy apartment in Joondalup or a family house in the suburbs? Either way, it’s important to understand how the type of property you choose can affect your home loan.
Lenders look at houses and apartments differently when it comes to loan approvals, interest rates, and how much deposit you’ll need. So if you’re comparing your options, here’s a quick guide to help you understand the key differences and how they could impact your buying power.
How Property Type Affects Your Loan
Your borrowing power and the kind of loan you can get depends a lot on the type of property you’re buying.
Loan to Value Ratio (LVR):
- Houses usually qualify for higher LVRs — often up to 95%
- Some lenders cap apartments at 90% LVR (or lower if it’s a small or high-rise unit)
- That means a bigger deposit might be needed for apartments, generally apartments are cheaper than an established house so this could even out!
Lenders Mortgage Insurance (LMI):
- LMI costs can be higher for apartments, especially if it’s a smaller unit or in a high-density building
- For houses, LMI is usually cheaper and sometimes avoidable with a larger deposit
Interest Rates Can Differ Too
Some lenders charge higher rates on apartments due to perceived risks, while others offer the same pricing regardless of property type.
- Variable rates may be higher for apartments
- Fixed rates might be limited, especially for certain types of units
- Some lenders don’t differentiate at all — and that’s where working with a broker helps, because we know who’s offering what
Extra Checks for Apartments
There are a few more hoops to jump through when buying an apartment. Lenders may look closely at:
- The building’s age and construction type
- Percentage of owner-occupiers vs investors
- Strata reports and any known defects
- Size and layout — especially if the unit is under 50sqm
For houses, the process is generally more straightforward, with broader lender acceptance and fewer restrictions.
The Application Process
Regardless of what you’re buying, the basics stay the same — things like your income, savings, and debts are key. But apartments often come with extra documentation requirements, like:
- Detailed valuations
- Strata reports
- Building condition assessments
For houses, it’s usually just the valuation and sometimes a building inspection.
What About Perth’s Property Market?
Perth offers plenty of choice — whether you’re chasing lifestyle, space, or investment value. No matter what you’re leaning towards, it pays to get local advice and understand the current market trends.
Stamp Duty:
Same rules apply across property types — but the actual cost depends on what and where you’re buying.
Pre-Approval Helps You Shop With Confidence
Getting pre-approved is a smart first step. Just keep in mind:
- Your pre-approval might be subject to property type
- Some lenders put restrictions on apartments (e.g. no high-rise or smaller units)
- You’ll find out exactly how much you can borrow and what deposit is required
Want to Boost Your Borrowing Power?
Here’s what can make a difference:
- Stable income and good employment history
- Clean credit record and minimal debt
- Choosing the right loan structure — fixed, variable, or split
- Using features like offset accounts to save on interest
Why Work With a Broker?
We live and breathe this stuff and we know which lenders are more flexible with apartments, which ones offer better deals for houses, and how to make your application stand out.
At G&T Finance, we can:
- Compare your options across dozens of lenders
- Help you understand the pros and cons for your situation
- Take care of the paperwork and make the process smoother
- Negotiate better rates and features that work for you
Final Thoughts
Whether you’re leaning towards a house or an apartment, the right financing makes all the difference. It’s not just about what you can borrow — it’s about setting yourself up for success now and in the future.
If you’re unsure which way to go, we’re here to help. Let’s chat through your goals and find the right loan for your next move.
Reach out to the G&T Finance team or book an appointment at a time that suits you — and take your next step with confidence.
