How Studio Apartment Size Impacts Loan Eligibility

The size of a studio apartment directly impacts the loan-to-value ratio (LVR) and, in turn, your borrowing power. If you’re purchasing a unit under 25 square metres, your LVR is limited to 60%. This means you’ll need a larger deposit, making it more difficult to secure loans for very small apartments without additional insurance.

For studio apartments between 25 and 35 square metres, the LVR limit increases to 70%. This provides borrowers with more flexible financing options, especially if they want to buy in highly populated areas. However, with lender’s mortgage insurance (LMI), borrowers may be able to secure 80% LVR, further improving access to funding.

For those considering a studio apartment of 35 square metres or more, the First Home Buyers Guarantee (FHBG) scheme allows up to 95% LVR, offering a significant advantage to first-time buyers. This is an excellent option for those wanting affordable apartment mortgages with lower deposit requirements.

Disclaimer: The content provided is for informational purposes only and is not financial advice. Please consult a professional advisor to discuss your specific situation.