Lenders assess property type before they assess you.
As a prosthodontist, your income structure and borrowing capacity usually work in your favour. But the property you choose can change the loan products available to you, the deposit you need, and whether certain lenders will even participate. A unit above four storeys might require 20% down with one lender and 10% with another. A property on leasehold land might lock you out of offset accounts. A house with a granny flat might be classed as dual occupancy, which narrows your options considerably.
Understanding how lenders view property types means you can structure your home loan application around what will actually be approved, rather than discovering restrictions after contracts are exchanged.
How property classification changes your loan structure
Lenders classify property types based on perceived risk, and that classification drives the loan terms they offer.
A detached house on freehold land typically attracts the widest range of products and the lowest deposit requirements. A one-bedroom apartment in a high-rise building might require a larger deposit, exclude certain loan features, or limit you to a smaller pool of lenders. The same applies to townhouses, duplexes, or properties with non-standard construction. Each category shifts the terms.
Consider a prosthodontist purchasing a two-bedroom apartment in a building with 12 storeys. One lender might cap the loan to value ratio at 80%, requiring a 20% deposit. Another might lend at 90% but charge a higher interest rate or exclude the offset account. A third might refuse the application outright if the building has less than 50% owner-occupiers. None of these restrictions apply to a comparable house in the same suburb, even at the same price point.
This is one reason we review property type during loan pre-approval, not after you've found something you want to buy. If you know the building height or ownership mix will narrow your options, you can adjust your deposit or your search parameters accordingly.
Apartments and unit title properties
Apartments are treated differently depending on building size, age, and ownership structure.
Most lenders accept apartments in low-rise buildings without additional conditions. Once the building exceeds four storeys, or if it contains fewer than six units, some lenders apply stricter loan to value ratios or exclude certain loan features. Buildings with a high percentage of investor-owned units, or those flagged for cladding or defect issues, may be restricted further.
In our experience, prosthodontists purchasing apartments often assume they can access the same home loan options as they would for a house. That assumption holds until the valuation comes back or the lender's property team reviews the strata report. At that point, the loan might be reduced, restructured, or declined.
If you're purchasing an apartment, confirm the following before making an offer: total number of units in the building, number of storeys, percentage of owner-occupiers, and whether the body corporate has flagged any structural or compliance issues. These details determine whether your loan proceeds as planned or requires a different lender entirely.
Townhouses, duplexes, and dual occupancy
Townhouses are generally treated the same as houses, provided they are on their own title.
Duplexes and dual occupancy properties are more complex. If the property is on a single title with two dwellings, most lenders will treat it as non-standard security. That usually means a higher deposit, a smaller pool of lenders, and potentially no access to offset accounts or interest only loans. If the duplex is on separate titles and you're purchasing only one half, it's typically treated as a standard townhouse.
As an example, a prosthodontist purchasing a duplex on a single title with a second dwelling rented out might find that lenders require 20% down, even though the same lender would accept 10% for a standard house. The second dwelling increases perceived risk, and that changes the lending criteria.
If the property you're considering has a granny flat, secondary dwelling, or dual street frontage, ask whether it's on a single title or strata. That distinction will determine whether it's classified as dual occupancy or a standard residence.
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Rural, semi-rural, and land size restrictions
Properties on larger blocks or in rural zones face additional scrutiny.
Most lenders cap the land size they will accept as security. A common threshold is two hectares for owner-occupied loans and one hectare for investment loans. Beyond that, the property is classified as rural, and only a subset of lenders will consider it. Those that do may require a larger deposit, charge a higher interest rate, or exclude certain loan features.
Zoning also matters. A property zoned rural residential is usually acceptable. A property zoned primary production, even with a house on it, may be declined by mainstream lenders and require a rural finance specialist.
In a scenario like this, a prosthodontist purchasing a property on three hectares near a regional centre might assume it qualifies as a standard owner-occupied loan. The zoning is rural residential, there's town water, and the property functions as a family home. But because the land exceeds two hectares, half the lenders on our panel decline the application outright. The remaining lenders offer terms that include a 20% deposit and a variable rate with no offset.
If you're purchasing outside metropolitan or urban growth zones, confirm the land size and zoning before making an offer. We can tell you which lenders will participate and what terms they'll apply.
Leasehold, company title, and non-standard ownership
Leasehold and company title properties are treated as higher risk by most lenders.
Leasehold means you own the building but lease the land, usually for a fixed term. Lenders view this as less secure than freehold, and many will either decline the application or require a significantly larger deposit. Company title means you own shares in a company that owns the building, rather than owning the property outright. Most mainstream lenders do not accept company title as security.
If the property you're considering is leasehold, check the remaining lease term. Some lenders require at least 30 years remaining at settlement. Others require the lease term to exceed the loan term by a set margin. If the lease is due for renewal within the life of the loan, expect fewer lenders and tighter conditions.
How construction type affects lending decisions
Properties built with non-standard materials or methods require different assessment.
Most lenders accept standard brick, weatherboard, and fibro construction without issue. Properties built with mud brick, rammed earth, or transportable construction may require specialist lenders or a larger deposit. The same applies to properties with asbestos cladding, even if the asbestos is contained and compliant.
If the property valuation identifies non-standard construction, the lender may request a building inspection or reduce the approved loan amount. In some cases, the loan will proceed but certain features such as an offset account or split rate structure will be excluded.
We've seen this with prosthodontists purchasing character homes or properties in regional areas where construction methods vary. The property itself is sound, but the lender's security policy limits the loan structure. Knowing this in advance means you can adjust your deposit or choose a lender with more flexible security policies.
Linking property type to your loan strategy
Your loan structure should reflect both your income and the property type you're purchasing.
If you're buying a standard house on freehold land, you'll have access to the full range of loan products, including low deposit loans, offset accounts, and split rate structures. If you're buying an apartment, a rural property, or a non-standard dwelling, your strategy needs to account for the narrower range of lenders and the higher deposit they may require.
This is where your income as a prosthodontist works in your favour. Even if the property type limits your loan options, your capacity to service the debt usually allows you to meet the higher deposit or accept a slightly less flexible loan structure. But that only works if you know the restrictions before you commit.
Call one of our team or book an appointment at a time that works for you. We'll review the property type you're considering, confirm which lenders will participate, and structure the loan around the terms that actually apply to your purchase.
Frequently Asked Questions
Do lenders treat apartments differently to houses for home loans?
Lenders assess apartments based on building height, number of units, and ownership mix. High-rise buildings or those with fewer owner-occupiers may require a larger deposit or exclude certain loan features.
What deposit do I need for a rural property?
Rural properties typically require a 20% deposit, and only a subset of lenders will consider them. Land size, zoning, and remaining lease term all affect whether a lender will approve the loan.
Can I get an offset account if I buy a dual occupancy property?
Dual occupancy properties on a single title are often classed as non-standard security. This usually means a higher deposit and limited access to features like offset accounts or interest only terms.
What happens if the property has non-standard construction?
Non-standard construction such as mud brick or transportable buildings may require specialist lenders or a larger deposit. Some lenders will approve the loan but exclude certain features like offset accounts.
Do I need a different lender if I buy a leasehold property?
Most mainstream lenders either decline leasehold properties or require a significantly larger deposit. Lenders that do participate typically require at least 30 years remaining on the lease at settlement.
