I’m looking at buying an investment property at Newtown $700k… instead of putting it with an agent I want to put it on Airbnb. Can I still borrow 90% and will lenders consider the rental forecasts, thanks?

Hi Jason

Yes you can still borrow up to 90% inclusive of LMI premium, however the lender and the mortgage insurer will only take normal market rent into consideration to demonstrate serviceability. The lenders valuation report will show a rental estimate and this will be used as pat of your income. Note that lenders only take 80% of rental income into servicing.

In relation to renting your property on AirBnB; you need to be sure that you are able to rent out your property on an ongoing basis; especially if you are reliant on the rental income to service the loan.

Please feel free to contact me on 0414 727 308 or 1800 824 325 if you want to discuss further as we can also assist you with the finance side of things.

Regards
Sam Zammit
South West Lending Solutions

Hi Jason,
Great question; properties listed on site like Airbnb are considered serviced apartments by most lenders, as a result the maximum LVR is typically 70%~80%.
The other challenge is proving the income. While rental forecasts are great they are just that, forecasts with no guarantees. Are there similar units or properties for which you can supply 2 years returns for to demonstrate the consistency of income? These can help when presenting the application to the lender.
Airbnb can be a great option but before undertaking this form of rental you should consider the implications if the property goes untenanted or below market rental for 3~4 weeks. How will you cover the loan repayments?
Hope this helps
regards
Awesome Albert

Hi Jason,
Further to your updated question, you can potentially borrow 90% for investment purposes
Provided that the lender and the mortgage insurer are happy with the valuation risk

Dear Jason,
Sorry for the late reply,
Normal banks that provide a good interest rates usually lend 90% of mortgage insurance. The mortgage insurance at 88% is around 1.7% or so depending on the loan size. The higher the loan size above 750K, .
You would need to budget for 12% plus costs, That is $84,000 plus $30,000 (stamp duty & costs)
A total of $114,000.
There are second tier lenders that would need only around 9% deposit $21,000 less. a total of $93,000. but they don't offer the best rates.
regards