Getting a Home Loan for an Apartment

Why apartments get extra scrutiny

An apartment's value depends on things outside your front door: the building, the other owners and the body corporate. If the building needs expensive repairs, every owner pays. Lenders learned that during the leaky building years and they check carefully now.

What lenders look at

The size thresholds really do vary. An apartment one lender won't touch may be standard lending for another, so the property decides the lender as much as you do.

Read the body corporate documents

Under the Unit Titles Act the seller must give you a pre-contract disclosure statement before you sign. Your lawyer can request more. The points that matter for lending and for your wallet:

• Annual levies, and whether they're rising.
• The long-term maintenance plan and the balance of the fund behind it.
• Any special levies planned or being discussed.
• Weathertightness or earthquake-prone building notices, and any claims under way.
• Minutes of recent meetings. This is where problems show up first.
• Insurance: that the building is insured for full replacement, and what the excess is.

Lenders include levies in your budget, so a high levy reduces what you can borrow.

Leasehold apartments

With leasehold you own the apartment and rent the land. Ground rent is reviewed periodically and can rise sharply, which has left some owners with apartments that are hard to sell. Many lenders won't lend on leasehold, and those that do want a bigger deposit and a long time until the next rent review. We go through it in leasehold apartment mortgages.

Buying one that isn't built yet

Off-the-plan apartments add timing risk, because finance is confirmed at completion, sometimes years after you sign. See buying off the plans. New apartments do benefit from the new-build exemption from loan-to-value restrictions, where the lender's own policy allows it.

Check before you offer

Because so much rests on the specific building, check the lending before you fall for the view. Send us the listing and the disclosure statement. We can usually tell you within a day which lenders will consider it and what deposit they'd want.

This article explains how New Zealand lenders generally assess these situations. It is general information, not personalised financial advice, and lender policy changes often — check your own position with a registered adviser. Official sources: Reserve Bank of New Zealand for lending policy and the OCR, and Sorted.org.nz for independent government-backed money guidance.