A block of units can look like a straightforward investment: several rents coming in, one address to manage and more control than buying a single apartment. But the question, “multiple units in one block that I can finance”, has no one-size-fits-all answer. The number of dwellings, their titles, the zoning, your income and the condition of the property can all change the type of loan available.
When your bank says no, it does not always mean the property or your plan is unfinanceable. It may mean the application sits outside that bank’s residential policy. A specialist lender may take a different view, particularly where the security is sound and the loan purpose makes commercial sense.
What counts as multiple units in one block?
This can describe a few very different properties. You may be looking at a house with a granny flat, a duplex, a small block of four strata-titled units, or a single-title building containing several self-contained flats. Each has a different lending path.
A duplex or a small number of dwellings on separate titles may be assessed much like a residential investment purchase, provided the lender accepts the property type and location. A whole block held on one title can be more complicated. Even if it contains residential units, a lender may treat it as specialised residential security or commercial property, especially where there are several tenancies, shared services or more than four units.
That distinction affects your deposit, interest rate, documentation requirements and how much rental income the lender will use. Before you make an offer, confirm whether the units are separately titled, strata titled or all held under one title. Do not rely on the agent’s description alone.
Can I finance multiple units in one block?
Yes, potentially. The right facility depends on the property and your financial position rather than the fact that you own, or want to buy, more than one unit.
For a smaller residential-style property, a residential investment loan may be suitable. For a larger single-title block, commercial property finance may be more appropriate. Commercial lending is not only for shops, warehouses and offices. It can also apply to residential unit blocks where the property is run more like an income-producing business than a standard home loan security.
Some lenders are comfortable with a small block of units; others will not consider it at all. Their policies can vary on the maximum number of units, minimum floor area, postcode, property condition, vacancy level and concentration of units in one location. That is why a decline from one lender should not be treated as the final answer.
How lenders assess a unit block purchase
Lenders want to see two things: that the property is acceptable security and that you can meet the repayments if conditions change. The valuation is central. A valuer will consider the building’s condition, current leases, market rents, local demand, comparable sales, zoning and whether the property could be readily sold if necessary.
Rental income matters, but lenders rarely use every dollar of it. They may apply a shading percentage to allow for vacancies, management fees, repairs, rates and other holding costs. If one or two units are vacant, the lender may calculate serviceability from the lower actual income rather than the advertised potential rent.
Your personal position still matters too. This can include PAYG wages, business income, existing mortgages, credit card limits, personal loans, tax debt and living expenses. Where you are self-employed, a full-doc application with current financials may provide the broadest options. If your documents are limited but your declared income and business activity support the loan, a low doc commercial or residential option may be worth considering.
Credit history is another factor, not necessarily a full stop. Missed repayments, defaults, paid judgments or a discharged bankruptcy can narrow the lender pool, but specialist lenders may assess the reason, timing and current conduct. A clean recent repayment record, equity or a meaningful deposit can help strengthen the application.
Deposit and loan-to-value ratio expectations
The loan-to-value ratio, or LVR, is the percentage of the property value you want to borrow. A larger deposit generally creates more options, especially for a single-title block or a property that sits close to commercial lending policy.
There is no universal LVR for multiple-unit properties. Smaller residential blocks may qualify for a higher LVR than larger or more specialised assets. A lender may also reduce the maximum LVR if the units are in poor condition, are all vacant, have unusual construction, or are in a location with limited resale demand.
Remember that your deposit is not the only cash requirement. Allow for stamp duty, legal costs, valuation fees, building reports, loan establishment costs and a buffer for repairs or vacancies. If the building needs substantial work, discuss whether the funding needs to cover purchase only or whether a separate construction, renovation or commercial facility is required.
Funders have special lvr lending policies for Multiple Units in One Block due to exposure limits.
- 1 > 3 units to 90% LVR
- 4 units maximum 80% LVR
- 5 > 6 units to 70% LVR
- More than 6 units considered to a max LVR of 60% (cat 2 & 3 locations max 50% LVR)
The details that can make or break approval
A unit block application is often decided by the details that do not appear in a quick online calculator. For example, lenders may ask whether each unit has its own kitchen and bathroom, whether utilities are separately metered, whether there are current leases, and whether the building complies with council and fire safety requirements.
They may also review the tenancy schedule. A property with stable, documented tenants and rent paid into a bank account is easier to assess than one with informal arrangements or significant arrears. If rents are below market, that can be both an opportunity and a question mark. The lender will want evidence that increases are realistic, not just optimistic projections.
Zoning deserves careful attention. A property advertised as a block of flats may have historical use rights rather than current approval for its present configuration. If you plan to add units, subdivide, strata title or redevelop, finance should be structured around that specific strategy. A standard purchase loan does not automatically fund a future development plan.
Residential finance versus commercial property finance
The best loan is not always the one with the lowest headline rate. Residential investment finance can offer longer terms and may suit a straightforward duplex or small strata arrangement. Commercial property finance can be more flexible for a single-title unit block, but it may require a lower LVR, more detailed financial information or different repayment conditions.
The choice also depends on your exit plan. Are you buying and holding for rental income? Will you renovate and improve the tenancy profile? Do you intend to strata title and sell units individually? These plans carry different risks, timeframes and finance requirements.
If your serviceability is tight, refinancing existing debts may improve cash flow, but it should not be used to hide an unworkable investment. The rental income needs to stand up after realistic allowances for interest, rates, insurance, maintenance and vacancies. Good finance supports a sound purchase; it cannot turn a poor one into a good deal.
Preparing a stronger finance application
Start by gathering the contract of sale, title search, rental schedule, leases, rates notices and any building or compliance information available. If you are purchasing through a company or trust, have the entity documents ready as well. Self-employed borrowers should prepare recent tax returns and financials where available, plus business activity statements or accountant-prepared income evidence for a low doc pathway.
Be upfront about credit issues and existing debt from the beginning. A broker who specialises in non-conforming loans can match the application to lenders that are more likely to consider your circumstances, rather than submitting it repeatedly to lenders whose policies do not fit. That protects your time and helps avoid unnecessary credit enquiries.
Non Conforming Loans can provide a second opinion when a conventional bank has declined your unit block proposal. The focus is on the whole picture: the property, rent, deposit, income evidence, credit history and the purpose behind the purchase.
A block of units can offer valuable income diversity, but it also brings extra responsibility. Get the titles, tenancy position and valuation assumptions checked early, keep a realistic cash buffer, and seek finance that suits the property you are buying rather than forcing it into the wrong loan category.
