Can You Get Finance for a Mixed-Use Property in Australia?

Getting Finance for a Mixed-Use Property in Australia

Yes, you may be able to get finance for a mixed-use property in Australia, but it is one of the more policy-sensitive property types.

A mixed-use property can sit between residential lending and commercial lending. Some lenders may consider it under residential policy if the property is still mainly residential, can be valued on a residential basis, allows permanent occupancy and has strong marketability. Other lenders may treat it as commercial property, restrict the LVR, require a full valuation, refer it to business banking, or decline it as unacceptable security.

This guide explains how lenders may assess mixed-use properties, based on current policy research.

What is a mixed-use property?

A mixed-use property is a property that has both residential and commercial or business use.

Examples may include:

• shopfront with a residence upstairs
• café with a dwelling attached
• office with a residential unit at the rear
• residence attached to a medical suite
• shop and residence on one title
• warehouse conversion with residential use
• residential property partly used for business
• rural residential property with business activity
• commercial premises with caretaker accommodation
• property zoned mixed use

Mixed-use property can be difficult because lenders need to decide whether the security is residential, commercial or something in between.

Can you get a home loan for a mixed-use property?

Possibly.

Some lenders may consider a mixed-use property if the residential component is strong enough and the property can still be treated as acceptable residential security.

A lender may look at:

• zoning
• current use
• residential floor area
• commercial floor area
• whether permanent residential occupancy is allowed
• whether the property can be valued as residential
• whether there is a commercial lease
• whether the borrower will live there
• whether the property is mainly business use
• whether the property is readily saleable
• whether a full valuation supports the security

Other lenders may say a mixed-use property is not acceptable under ordinary residential lending.

Can you get a business loan for a mixed-use property?

Yes, with the right lender.

If the property has a meaningful commercial component, a business or commercial lender may be more suitable.

A business loan may be considered where the property is used for:

• business premises
• commercial rental income
• shop or office use
• owner-occupied business use
• mixed commercial and residential tenancy
• professional rooms
• hospitality premises
• retail premises
• medical or allied health use
• investment property with commercial lease

The loan may be assessed under commercial property lending rather than standard residential home loan policy.

Why is mixed-use property hard to finance?

Mixed-use property is hard to finance because lenders need to understand the true security risk.

A standard residential home loan assumes the property is mainly residential and easily saleable to ordinary home buyers or investors.

A mixed-use property may have a smaller buyer pool because the buyer may need to want both:

• a home or dwelling, and
• a commercial or business-use component

This can affect valuation, marketability, LVR, product eligibility and lender appetite.

Is mixed-use zoning enough to cause a problem?

Not always.

Some lender policy distinguishes between zoning and actual use.

A property may be in a mixed-use zone but still be acceptable if it allows residential use without restriction and functions as a standard residential dwelling.

A different property may be residentially zoned but still be unacceptable if it is predominantly used for commercial purposes.

Lenders usually care about both:

• what the property is legally allowed to be used for, and
• what it is actually being used for.

What if the property is zoned mixed use but used as a home?

This may be acceptable with some lenders.

A lender may ask:

• is residential use permitted without restriction?
• can the property be occupied permanently as a residence?
• does it contain a proper kitchen, bathroom and bedroom?
• is there any commercial lease?
• is there any business fit-out?
• is the property readily saleable as residential?
• does the valuation support residential use?

If the answer is favourable, some lenders may consider it.

However, lender appetite still varies.

What if the property is residentially zoned but used for business?

This can still be a problem.

A lender may be concerned if a residential property is being used as:

• shopfront
• office
• clinic
• salon
• childcare premises
• short-stay accommodation business
• commercial kitchen
• warehouse
• workshop
• rooming house
• business premises with signage and customer traffic

Even if zoning allows residential use, the actual business use may affect marketability and valuation.

What if the property is commercially zoned but has a residence?

This is often more difficult.

If the property is commercially zoned, many residential lenders may not treat it as standard residential security.

A commercial lender may be needed.

The lender may assess:

• commercial zoning
• residential component
• commercial lease
• business income
• property use
• vacancy risk
• valuation
• LVR
• borrower structure
• whether residential occupancy is lawful

Commercial zoning can materially reduce residential home loan options.

What does “residential use without restriction” mean?

This means the property can legally be used for residential purposes without a restriction that makes it unsuitable for ordinary residential lending.

A lender may be uncomfortable if residential use is limited by:

• zoning
• planning permit
• occupancy restriction
• management rights agreement
• commercial lease
• use covenant
• short-stay requirement
• student accommodation condition
• serviced apartment arrangement
• business licence requirement

A property that cannot be freely occupied as a normal residence may not fit residential lending policy.

What does “permanent residential occupancy” mean?

Permanent residential occupancy means the property can be lived in as an ordinary home.

A lender may ask whether the property has:

• full kitchen
• bathroom
• conventional bedroom
• living area
• direct access
• services
• lawful residential use
• no restriction requiring short-term, commercial or managed accommodation use

This matters because a property that looks like a dwelling may still be restricted in how it can be occupied.

Why does the valuation matter so much?

The valuation is critical for mixed-use property.

A lender may require a full valuation rather than an automated or desktop valuation.

The valuer may comment on:

• highest and best use
• zoning
• current use
• residential component
• commercial component
• marketability
• comparable sales
• rental evidence
• vacancy risk
• whether it can be valued as residential
• whether it should be valued as commercial

If the valuation treats the property as commercial or specialised, residential lender options may reduce.

Can a mixed-use property be valued as residential?

Sometimes.

Some lenders may consider a mixed-use property if the valuer can value it on a vacant possession residential basis.

This may be stronger where:

• the residential component is dominant
• permanent residential occupancy is allowed
• no commercial lease is in place
• commercial use is minor
• residential market appeal is strong
• the property can be sold to ordinary residential buyers
• the property has standard residential amenities

If the valuer cannot support residential marketability, the lender may decline or refer it to commercial lending.

What does “vacant possession” mean?

Vacant possession means the property is valued assuming it is available without being tied to a particular tenant, business operator or management arrangement.

For mixed-use property, this matters because a lender may not want security value to depend on a specific business lease, licence or operator.

A property that only has strong value because of an existing business may be treated differently from a property that can be sold as real estate.

Can a mixed-use property have a commercial lease?

Yes, but it can affect the loan.

A commercial lease may be relevant if:

• a shopfront is leased to a tenant
• a business occupies part of the property
• a commercial tenant pays rent
• the borrower’s own business leases the premises
• the property has both residential and commercial rental income

The lender may need to assess commercial lease income separately from residential rental income.

Related research: Can You Get a Home Loan for a Property with a Commercial Lease?

Can commercial lease income be used for servicing?

Possibly.

Some lenders may use commercial rental income, but it is often assessed differently from residential rent.

The lender may look at:

• lease term
• tenant quality
• rental amount
• outgoings
• vacancy risk
• whether lease is arms-length
• whether rent is market-based
• whether rent is paid on time
• whether the tenant is related to the borrower

Commercial rent can be useful, but it may be shaded or assessed more conservatively.

Can residential rental income be used as normal?

Possibly.

If the property has a separate residential dwelling, residential rental income may be used if supported by:

• lease agreement
• rental appraisal
• bank statements
• agent statement
• tenancy schedule

However, if the property is assessed as mixed-use or commercial, the lender may not treat the residential rent exactly like a standard investment property.

What if the borrower lives in the residential part?

This may help or complicate the application, depending on the structure.

The lender may ask:

• is the borrower occupying the residential component?
• is the business component leased or owner-used?
• is the property mainly residential?
• is the loan owner-occupied, investment, business or mixed purpose?
• does the property still qualify as residential security?
• will business income be used for servicing?

A borrower living above their own shop may need a different lending pathway from a standard home buyer.

What if the borrower runs a business from the property?

This can be acceptable in some cases, but it depends on the scale of business use.

Minor home business use may be fine, such as:

• home office
• consulting from a spare room
• online business
• bookkeeping
• remote work
• admin use

More significant business use may be harder, such as:

• shopfront
• clinic
• salon
• workshop
• commercial kitchen
• childcare operation
• customer-facing premises
• property modified mainly for business

The lender will consider whether the property remains residential in character.

Is a home office considered mixed-use?

Usually, a normal home office is not the same as mixed-use property.

Many borrowers work from home.

A home office may not be a problem if:

• the property remains a normal residence
• there is no major commercial fit-out
• customers do not attend in large numbers
• the property is not dependent on business use
• zoning and insurance are appropriate
• the property can be sold as an ordinary home

A home office becomes more relevant if it materially changes the property’s use or marketability.

What if the property has a shop downstairs and residence upstairs?

This is a classic mixed-use scenario.

The lender may assess:

• whether the shop and residence are on one title
• the percentage of residential versus commercial area
• zoning
• lease status
• whether the borrower occupies the residence
• whether the commercial component is vacant, leased or owner-used
• valuation basis
• marketability
• LVR

Many mainstream residential lenders may not treat this as a standard home loan.

What if the property is a converted warehouse?

Warehouse conversions can be acceptable with some lenders if they are completed, lawful, residential in use and marketable.

However, a former commercial property converted into apartments may be treated as non-standard real estate.

The lender may consider:

• whether conversion is complete
• certificate of occupancy
• residential zoning or permitted use
• full valuation
• marketability
• building condition
• strata or title type
• whether the development is registered or approved by the lender

A partially converted warehouse or live-work space may be more difficult.

What if the property is a live-work unit?

Live-work units can be tricky.

The lender may ask:

• is the residential component self-contained?
• is permanent residence allowed?
• is commercial activity required?
• is there a business zoning restriction?
• is it marketable to ordinary residential buyers?
• is there a separate commercial area?
• does the title or planning permit restrict use?

Some lenders may treat live-work units as mixed-use or commercial.

What if the property is a medical suite with residence?

This may be treated as commercial or specialised security.

A property used as a medical suite may have:

• consulting rooms
• waiting room
• treatment rooms
• commercial signage
• business fit-out
• disability access modifications
• commercial lease
• council approvals

If there is a residence attached, the lender still needs to decide whether the whole property is residential enough for home loan policy.

What if the property is a salon, clinic or professional rooms?

This is likely to raise mixed-use or commercial-use questions.

A lender may want to know:

• is the property still primarily residential?
• has it been converted for business?
• are customers attending?
• is there a commercial lease?
• are there specialised improvements?
• would an ordinary residential buyer want it?
• would the business fit-out reduce marketability?

If business use dominates, residential lending may not be available.

What if the property is a childcare centre with residence?

This is usually specialised and likely to require commercial assessment.

A childcare centre may involve:

• business licence
• council approval
• specialised fit-out
• outdoor play area requirements
• commercial valuation
• operator dependency
• regulatory risk

Some specialist lenders may consider childcare centre security, but it is not a standard residential property.

What if the property is a boarding house or rooming house?

This is related but usually a separate specialised security issue.

A boarding house, rooming house or co-living property may be residential in appearance but commercial in operation.

The lender may assess:

• number of rooms
• licence requirements
• tenancy arrangements
• commercial income
• marketability
• valuation basis
• fire and safety compliance
• whether it can be sold as ordinary residential property

Some specialist lenders may consider these properties, but many residential lenders will not treat them as standard security.

Related research: Can You Get Finance for a Boarding House, Rooming House or Co-Living Property?

What if the property has multiple dwellings and a business?

This becomes more complex.

The lender may already have policy limits on multiple dwellings on one title.

Adding a business component may make the property even more specialised.

The lender may assess:

• number of dwellings
• title structure
• commercial component
• rental income
• zoning
• valuation
• marketability
• LVR
• whether commercial lending is needed

A property with multiple residences and business use should be workshopped before applying.

Related research: Can You Get a Home Loan for a Property with Multiple Dwellings?

What if the property is partly industrial?

Industrial use usually pushes the application away from residential lending.

Industrial property may include:

• warehouse
• factory
• hardstand
• workshop
• storage yard
• manufacturing space
• trade premises

Even if there is accommodation attached, a residential lender may not accept the property as standard security.

A specialist or commercial lender may be needed.

What if the property is partly retail?

Retail use may be acceptable with specialist or commercial lenders, but can be difficult for standard residential lenders.

Retail property may include:

• shopfront
• café
• restaurant
• convenience store
• hairdresser
• showroom
• pharmacy
• takeaway shop

The lender may assess retail exposure, lease quality, property location, valuation and business use.

What if the property is partly office?

Office use may be easier than some other commercial uses, but it is still not standard residential security.

The lender may look at:

• whether the office area is minor
• whether the property is still liveable
• whether it has residential market appeal
• whether office use is easily reversible
• zoning and approvals
• commercial lease
• property valuation

A small home office is different from a dedicated commercial office premises.

Can mixed-use property be accepted by specialist lenders?

Yes.

Some specialist lenders may accept mixed residential and commercial use properties, sometimes with specific maximum LVRs.

Policy research shows that some non-bank or specialist lenders list mixed residential and commercial use as an acceptable security type, while mainstream residential lenders may be more restrictive.

This is why mixed-use property often needs broader lender comparison.

Can mixed-use property be accepted at 80% LVR?

Possibly.

Some specialist policies may allow mixed residential and commercial use up to 80% LVR.

However, this does not mean every mixed-use property qualifies.

The lender may still assess:

• postcode or location category
• property type
• valuation
• income
• borrower credit profile
• commercial component
• loan amount
• security marketability
• whether the property fits the lender’s definition

An 80% LVR option with one lender does not mean the whole market accepts the property.

Can mixed-use property be financed above 80% LVR?

This is usually difficult.

Above 80% LVR, lenders mortgage insurance and lender risk appetite become more restrictive.

Mixed-use security can be harder because:

• it is not standard residential security
• mortgage insurers may not accept it
• valuation risk is higher
• buyer pool may be smaller
• commercial component adds risk
• loan purpose may be partly business

If you need high-LVR finance, mixed-use property may significantly reduce options.

Can mixed-use property be financed below 70% LVR?

Usually, options improve as LVR reduces.

Lower LVR can help because the lender has more security margin.

At lower LVRs, specialist and commercial lenders may be more willing to consider:

• larger commercial component
• unusual zoning
• commercial lease income
• owner-occupied business use
• non-standard valuation
• business-purpose borrowing

Lower LVR does not guarantee approval, but it usually helps.

Can a mixed-use property qualify for a first home buyer loan?

Possibly, but it can be difficult.

First home buyer products and low-deposit schemes are usually designed for standard residential property.

A mixed-use property may create issues with:

• property eligibility
• owner-occupier status
• residential use
• LVR
• mortgage insurance
• scheme rules
• valuation
• loan purpose

A first home buyer should check lender and scheme eligibility before signing a contract.

Can the First Home Guarantee be used for mixed-use property?

This may be difficult.

Government guarantee schemes are generally intended for eligible residential homes.

A property with commercial use may not fit scheme requirements.

Even if the borrower qualifies personally, the property must also qualify.

A broker should check scheme rules, lender policy and property use before relying on the guarantee.

Can mixed-use property qualify for an owner-occupied rate?

Possibly, but not always.

If the borrower lives in the residential component, part of the loan may be owner-occupied in purpose.

However, if the property also has commercial use or business income, the lender may need to split or classify the loan differently.

The lender may consider:

• percentage used as residence
• percentage used for business
• income-producing use
• loan purpose
• borrower structure
• whether the loan is regulated or unregulated

Do not assume owner occupation automatically means standard owner-occupied pricing.

Can mixed-use property qualify for investment lending?

Possibly.

If the property is rented out, the lender may treat it as investment or commercial investment.

The lender may assess:

• residential lease
• commercial lease
• vacancy risk
• lease terms
• market rent
• security type
• property zoning
• LVR
• borrower income

An investment mixed-use property may be assessed more like commercial property than residential investment property.

Can mixed-use property be bought in a company or trust name?

Possibly.

A company or trust structure may be common for business or investment property.

The lender may need to review:

• company borrower policy
• trust borrower policy
• guarantors
• trust deed
• company financials
• business income
• commercial lease income
• loan purpose
• security ownership
• tax and legal structure

Entity borrowing plus mixed-use security can narrow lender options.

Can an SMSF buy a mixed-use property?

Possibly, but it is highly specialised.

SMSF lending has strict legal and lender requirements.

A mixed-use property may raise issues around:

• related-party use
• business real property
• residential component
• lease arrangements
• limited recourse borrowing rules
• valuation
• lender policy

An SMSF trustee should obtain specialist legal, tax and lending advice before considering mixed-use property.

Can you refinance a mixed-use property?

Yes, with the right lender.

Refinancing may be possible if:

• valuation supports the property
• lender accepts the security
• LVR is within policy
• income supports the loan
• commercial lease or business income is acceptable
• title and zoning are clear
• loan purpose is acceptable
• existing conduct is clean

However, refinancing can be harder if your current lender accepted the property under old policy and new lenders have stricter rules.

Can you release equity from a mixed-use property?

Possibly.

Equity release may be harder than a simple refinance because the lender also assesses cash-out purpose.

The lender may ask:

• what will funds be used for?
• is it business purpose?
• is it personal purpose?
• will funds improve the property?
• will funds be used for working capital?
• is the LVR conservative?
• is the security acceptable?

Cash out against mixed-use property can be more policy-sensitive than standard residential equity release.

Can you use mixed-use property as security for business finance?

Yes, with selected lenders.

A business lender may accept mixed-use property as security, particularly if the commercial component supports the business purpose.

The lender may assess:

• property valuation
• LVR
• commercial use
• business income
• rental income
• borrower credit profile
• lease terms
• exit strategy
• location
• marketability

This may be a better fit than trying to force the property through residential policy.

Can you use mixed-use property as security for a home loan?

Sometimes.

The property must usually still meet residential security criteria.

The lender may want evidence that:

• residential use is lawful
• permanent occupancy is allowed
• property is marketable as residential
• commercial use is minor or acceptable
• valuation supports residential basis
• property is not mainly business use
• no commercial DA changes the character of the property

If these points are weak, residential lending options reduce.

Can a mixed-use property be unacceptable security?

Yes.

A lender may decline if the property is:

• mainly commercial
• industrial in nature
• business-dependent
• not readily saleable as residential
• commercially zoned without residential use
• subject to restrictive occupancy
• tied to management rights
• converted for commercial use
• income-producing through business activity rather than ordinary rent
• too specialised for residential valuation

Unacceptable security rules vary by lender.

What if the property is “predominantly commercial”?

This is likely to be treated as commercial property.

A lender may consider the property predominantly commercial if:

• most floor area is business use
• main value comes from the commercial part
• residential dwelling is secondary
• lease income is commercial
• buyer pool is mainly business buyers
• zoning and approvals are commercial
• residential occupancy is limited

Commercial lending may be required.

What if the property is “predominantly residential”?

This may improve lender options.

A property may be considered more residential if:

• residential dwelling is the main component
• business use is minor
• residential occupancy is lawful and unrestricted
• commercial fit-out is removable
• property can be sold as a normal home
• valuation supports residential use
• no commercial lease controls the property

However, the lender must still accept the property type.

Can the commercial part be ignored?

Usually, no.

Even a small commercial component can matter if it affects marketability, zoning, income, lease rights or valuation.

The lender may need to understand:

• what the commercial area is used for
• whether it is leased
• whether it has separate access
• whether it has specialised fit-out
• whether it can be converted back to residential use
• whether it affects resale

Ignoring it can lead to surprise decline.

Does floor area split matter?

Yes.

The lender and valuer may consider the split between residential and commercial floor area.

For example:

• 90% residential and 10% home office may be easier
• 60% residence and 40% shop may be harder
• 30% residence and 70% commercial may likely need commercial lending

There is no universal percentage rule across all lenders, but the split matters.

Does income split matter?

Yes.

The lender may consider whether income comes from:

• residential rent
• commercial rent
• business income
• short-term accommodation
• rooming income
• owner-occupied business use
• related-party lease payments

A property mainly supported by commercial or business income may be treated differently from an ordinary residential investment property.

Does title structure matter?

Yes.

Mixed-use properties may be on:

• one title
• strata title
• stratum title
• company title
• separate titles for residential and commercial lots
• community title
• mixed-use development title

If residential and commercial components are on separate titles, financing may be easier or more complex depending on which title is security.

One title with mixed use can be more challenging because the lender cannot separate the risk.

What if the residential and commercial parts are on separate titles?

This may help.

If the borrower can finance only the residential title under residential lending and the commercial title separately, lender options may improve.

However, the lender will still review:

• cross-use arrangements
• access
• services
• leases
• title restrictions
• whether each title is independently saleable
• whether the security can be sold separately

Separate titles can help only if they are truly separable and marketable.

What if the property is on one title?

One title can be harder.

If the shop and residence are inseparable, the lender must accept the whole property as security.

The valuation will reflect the combined use.

If the lender does not accept the commercial component, it may decline the entire property.

Can strata mixed-use property be acceptable?

Possibly.

Some mixed-use developments include residential apartments above retail or office spaces.

A standard residential unit in a mixed-use building may be acceptable if the unit itself is residential and not tied to commercial use.

However, issues may arise if the unit is:

• used as management office
• tied to management rights
• restricted to commercial or short-stay use
• part of a serviced apartment pool
• located in a complex with low residential market appeal
• under specialised body corporate arrangements

The lender will assess the specific unit and development.

What if the unit is above shops?

This can be acceptable with some lenders if the unit is standard residential security.

The lender may consider:

• separate residential title
• residential use
• marketability
• noise or amenity issues
• building condition
• commercial neighbours
• body corporate structure
• valuation comments

A residential apartment above a retail strip is not automatically mixed-use security if the security itself is only the residential unit.

What if the property is tied to management rights?

This can be a problem.

Some lender policy excludes or restricts properties tied to management rights of a complex or unit development.

The lender may worry that the property cannot be freely sold or occupied as ordinary residential property.

If the property functions as a manager’s residence, reception office or management rights asset, it may need specialist assessment.

Related research: Can You Get Finance for a Property with Management Rights?

Can management rights income be used?

Possibly, but it is specialised.

Management rights may involve business value, caretaking agreements, letting agreements and body corporate arrangements.

A standard residential lender may not treat management rights income like ordinary rent or PAYG income.

This topic usually needs a specialist lender and a separate review.

Does a commercial development application matter?

Yes.

If there is a commercial DA in place, the lender may be cautious or decline under residential policy.

A commercial DA may suggest the property’s future use is not standard residential.

The lender may ask:

• what development is approved?
• has work started?
• does it change property use?
• will residential occupancy remain?
• is valuation based on current or future use?
• is commercial construction finance required?

Residential lenders generally do not want ordinary home loans funding commercial development risk.

Can you get construction finance for mixed-use property?

Possibly, but it is often commercial or business lending.

Residential construction finance usually suits ordinary residential builds.

Mixed-use construction may involve:

• retail plus dwelling
• commercial fit-out
• business premises
• residential apartments above shops
• commercial DA
• business banking referral
• progress payment complexity
• specialist valuation

Some lenders may refer mixed-use or non-standard construction to business banking.

Can you renovate a mixed-use property with a home loan?

Possibly, but the scope matters.

Minor residential renovations may be considered by some lenders.

Commercial fit-out or conversion may need commercial lending.

The lender may ask:

• are works residential or commercial?
• is a fixed-price contract required?
• are council approvals in place?
• will the property remain residential?
• is the valuation as-is or as-if-complete?
• is the borrower funding business premises improvements?

A commercial fit-out is not the same as renovating a kitchen or bathroom.

Can you convert a commercial property into residential property?

Possibly, but it can be difficult.

The lender may require:

• approved residential use
• completed conversion or clear construction pathway
• occupancy certificate
• valuation as residential
• evidence no commercial restrictions remain
• full valuation
• acceptable title and zoning
• funds to complete

Some lenders may not provide loan funds until conversion is complete and the property qualifies as residential security.

Can you convert a residential property into commercial use?

This can create lending problems.

If a residential security property is converted into commercial use, future refinancing may be harder.

The property may become unacceptable to lenders that only accept standard residential security.

Borrowers should check lender, council, insurance and tax implications before converting a home to business premises.

Can mixed-use property be used as security for cash out?

Possibly.

The lender may consider:

• property acceptability
• LVR
• valuation
• purpose of cash out
• business use
• commercial lease income
• borrower credit conduct
• whether loan is residential or commercial

Cash out for business purposes against mixed-use property is more complex than cash out against a standard home.

Can you use mixed-use property to refinance business debts?

Possibly.

A lender may accept the property as security and use funds to refinance business debts, but both the property and loan purpose need to be acceptable.

The lender may ask for:

• property valuation
• business debt statements
• payout figures
• business bank statements
• BAS
• ATO position
• accountant letter
• explanation of debt refinance

A specialist lender may be needed.

Related research: Can You Refinance Business Debt into a Home Loan?

Can you buy a mixed-use property with a low deposit?

Usually, this is harder.

Low-deposit loans generally need standard, acceptable residential security.

Mixed-use property may trigger:

• lower maximum LVR
• no LMI approval
• full valuation
• commercial lender referral
• larger deposit requirement
• more evidence
• higher interest rate

A larger deposit can materially improve options.

Can a mixed-use property be bought with 5% deposit?

This is usually difficult.

A 5% deposit loan normally depends on high-LVR residential policy, LMI approval or government guarantee.

Mixed-use property may not qualify because it is non-standard or commercial in nature.

Borrowers should not sign a contract assuming a 5% deposit will work.

Can a mixed-use property be bought with 10% deposit?

Possibly, but still difficult.

At 90% LVR, the property usually needs to be acceptable to a lender and mortgage insurer.

A mixed-use property may be declined at high LVR even if the borrower has strong income.

A 10% deposit may not be enough if the property is treated as commercial.

Can a mixed-use property be bought with 20% deposit?

This is more realistic.

At 80% LVR, some specialist lenders may consider mixed-use security.

However, lender appetite still depends on:

• property type
• valuation
• residential/commercial split
• location
• borrower credit profile
• income evidence
• loan purpose
• commercial lease or business use

A 20% deposit helps, but it does not make every mixed-use property acceptable.

Can a mixed-use property be bought with 30% or 40% deposit?

Yes, options usually improve.

At lower LVRs, commercial and specialist lenders may be more flexible.

This can help where:

• commercial component is meaningful
• property is unusual
• lease income is commercial
• borrower is self-employed
• company or trust borrower is used
• valuation is complex
• property is outside standard residential appetite

The trade-off may be higher rates or commercial loan terms.

Can mixed-use property rates be higher?

Yes.

If the loan is treated as commercial, specialist or non-standard, the rate may be higher than a standard residential home loan.

Costs may include:

• higher interest rate
• commercial valuation fee
• lender legal fees
• risk fee
• establishment fee
• annual review fee
• shorter loan term
• lower maximum LVR

Not all mixed-use loans are expensive, but borrowers should not assume standard home loan pricing.

Can mixed-use property have a shorter loan term?

Possibly.

Commercial and business loans may have shorter terms than residential home loans.

A lender may offer:

• 15-year term
• 20-year term
• 25-year term
• interest-only period
• residual or review structure
• annual review

Residential loans may offer up to 30 years, but mixed-use or commercial classification can change that.

Can mixed-use property have annual reviews?

Possibly.

Commercial loans may be reviewed periodically.

The lender may review:

• lease status
• rental income
• business financials
• valuation risk
• repayment conduct
• LVR
• borrower financial position

This is different from a standard residential loan that usually does not have annual business-style reviews.

Can mixed-use property be assessed under consumer credit?

It depends on purpose.

If the loan is mainly for personal residential purposes, consumer credit rules may apply.

If the loan is wholly or predominantly for business or investment purposes, it may be treated differently.

Mixed-use property can make the purpose analysis more complex.

The borrower should understand whether the loan is consumer, investment, business or commercial credit.

Can the loan be split between residential and business purposes?

Possibly.

If part of the loan is for residential purpose and part is business purpose, the lender may use separate splits.

This can help with:

• tax tracing
• purpose classification
• repayment tracking
• owner-occupied versus investment treatment
• business-purpose funds
• accountant records

However, splitting the loan does not solve security acceptability if the property itself is unacceptable.

Can tax deductibility be affected?

Yes, but this is tax advice.

Tax deductibility usually depends on the use of borrowed funds and the use of the property.

Mixed-use property may involve:

• residential occupancy
• commercial rental income
• business premises use
• depreciation
• GST
• capital gains tax
• land tax
• apportionment of expenses

Borrowers should speak with an accountant before buying or refinancing mixed-use property.

Can GST apply to mixed-use property?

Possibly.

Commercial property transactions can involve GST issues.

Residential property is often treated differently from commercial property.

A mixed-use property may need tax advice to determine:

• whether GST applies
• whether margin scheme applies
• whether going concern rules apply
• whether commercial rent includes GST
• whether input tax credits are available
• whether the contract price is GST-inclusive or plus GST

GST mistakes can affect funds to complete.

Can land tax be different for mixed-use property?

Possibly.

Land tax treatment depends on the state, ownership structure and use of the property.

A property held in a company or trust, or used partly for commercial purposes, may have different land tax treatment from a standard owner-occupied home.

This should be checked before purchase.

Can mixed-use property affect insurance?

Yes.

Insurance is important.

A lender may require adequate insurance for the property.

A mixed-use property may need:

• residential building insurance
• commercial building insurance
• landlord insurance
• public liability cover
• business insurance
• strata insurance
• loss of rent cover
• specialised policy for business use

Standard home insurance may not be enough if the property is used commercially.

Can mixed-use property affect council rates?

Possibly.

Council rates may differ based on use and zoning.

Commercial or partly commercial property may have different rating treatment from residential property.

This may affect ongoing costs and serviceability.

Can mixed-use property affect borrowing capacity?

Yes.

Borrowing capacity may be affected by:

• higher assessment rates
• lower rental shading
• commercial lease treatment
• business debt obligations
• shorter loan term
• higher repayments
• lower LVR
• higher expenses
• company or trust structure
• tax and insurance costs

Even if the property is accepted, the loan amount may be lower than expected.

Can a borrower use business income to service a mixed-use property loan?

Yes, if the lender accepts the income.

Business income may be supported by:

• tax returns
• company financials
• BAS
• business bank statements
• accountant declaration
• director salary credits
• lease income
• interim financials

The lender may also include business debts and tax obligations in servicing.

Can a borrower use lease income from their own business?

Possibly.

If the borrower owns the property and their related business pays rent, the lender may assess this carefully.

They may ask:

• is the lease arms-length?
• is rent market-based?
• does the business actually pay rent?
• is the business profitable?
• can the borrower double count business income and rent?
• are there related-party transactions?

Related-party lease income can be harder than third-party rent.

Can a borrower use rent from a third-party commercial tenant?

Possibly.

This may be stronger if the tenant is unrelated and the lease is formal.

The lender may review:

• lease agreement
• remaining lease term
• rent amount
• outgoings
• tenant history
• rental payments
• vacancy risk
• market rent
• property valuation

A strong commercial lease can help, but it does not make the security residential.

Can mixed-use property be refinanced from commercial to residential lending?

Sometimes.

This may be possible if:

• property use has changed
• commercial lease ended
• residential use is now dominant
• zoning allows residential use
• valuation supports residential basis
• property is marketable as residential
• lender accepts the security

However, some properties remain commercial in nature even if the owner wants a residential loan.

Can mixed-use property be refinanced from residential to commercial lending?

Yes.

This may happen if:

• the property is now used more commercially
• borrower wants business-purpose funds
• current lender no longer accepts the security
• commercial lease income is used
• company or trust borrower is involved
• standard residential refinance is unavailable

Commercial refinance can solve policy issues but may come with higher costs.

Can mixed-use property be declined after valuation?

Yes.

A lender may initially appear open to the scenario, then decline after valuation.

The valuation may identify:

• commercial use is too significant
• marketability is limited
• property is not residential enough
• zoning restricts use
• comparable sales are weak
• condition issues
• lease restrictions
• specialised improvements

For mixed-use property, valuation comments can make or break approval.

Can a broker pre-check the property before valuation?

A broker can often identify likely issues before application.

They may ask for:

• address
• zoning
• floor plan
• photos
• listing description
• contract
• lease documents
• title
• council information
• business use details
• estimated residential/commercial split

This can reduce the risk of applying to a lender that will never accept the property.

What documents are needed for a mixed-use property loan?

Documents may include:

• contract of sale
• title search
• zoning certificate
• council rates notice
• floor plan
• building area breakdown
• lease agreements
• rental appraisal
• commercial tenancy schedule
• business financials
• BAS
• business bank statements
• company or trust documents
• insurance details
• valuation report
• explanation of property use
• loan purpose explanation

The exact list depends on lender, property type and loan structure.

What should the property-use explanation include?

A strong explanation should cover:

• property address
• zoning
• current use
• intended use
• residential floor area
• commercial floor area
• whether borrower will live there
• whether any business operates there
• whether any commercial lease exists
• whether residential occupancy is unrestricted
• whether commercial use is minor or dominant
• how the loan will be serviced

This helps the lender decide whether the property fits policy.

What should your broker check?

Your broker should check:

• whether the lender accepts mixed-use security
• whether the property is residential or commercial for that lender
• maximum LVR
• valuation requirements
• whether full valuation is required
• whether commercial lease income is accepted
• whether business banking referral is required
• whether company or trust borrowers are allowed
• whether cash out is allowed
• whether high-LVR lending is available

Mixed-use property should be workshopped before submission.

What should your accountant check?

Your accountant should check:

• tax deductibility
• GST
• land tax
• business use apportionment
• lease arrangements
• company or trust ownership
• related-party rent
• depreciation
• capital gains tax
• loan split structure

Mixed-use property can create tax complexity.

What should your solicitor check?

Your solicitor should check:

• zoning
• permitted use
• contract terms
• lease terms
• title restrictions
• planning permits
• occupancy rights
• GST clauses
• outgoings
• body corporate rules
• whether the property can be used as intended

Legal review is especially important before the contract becomes unconditional.

What should the valuer check?

The valuer will usually consider:

• current use
• zoning
• location
• building layout
• residential component
• commercial component
• comparable sales
• marketability
• rental evidence
• vacancy risk
• highest and best use

The lender relies heavily on valuation commentary for mixed-use property.

10 common mistakes with mixed-use property finance

1. Do not assume mixed-use zoning is automatically fine.
2. Do not assume a shop and residence can be financed like a house.
3. Do not assume residential occupation guarantees residential lending.
4. Do not ignore commercial leases.
5. Do not sign a contract before checking lender appetite.
6. Do not rely on a 5% or 10% deposit without confirming property eligibility.
7. Do not assume the valuer will treat the property as residential.
8. Do not forget GST and tax advice.
9. Do not hide business use from the lender.
10. Do not assume your current bank will refinance it later.

How to improve your chances of approval

You can improve your chances by making the property and loan structure clear.

Helpful steps include:

• confirm zoning and permitted use
• gather floor plans and lease documents
• identify the residential and commercial split
• keep LVR conservative
• use a lender that accepts mixed-use security
• prepare business income evidence if needed
• get tax and legal advice early
• confirm whether commercial lending is required
• avoid high-LVR assumptions
• explain property use clearly
• provide full documentation before valuation

The clearer the security story, the easier it is for the lender to assess.

Should you wait before applying?

Sometimes.

Waiting may help if:

• zoning information is unclear
• lease documents are missing
• the property use is changing
• business financials are not ready
• valuation risk is high
• the commercial tenant situation is uncertain
• the contract name or borrower structure is not final
• tax or legal advice is needed

You may not need to wait if:

• documents are complete
• LVR is conservative
• property use is clear
• lender policy accepts the security
• valuation is likely to support the structure
• servicing evidence is ready

A broker can help determine whether the deal is ready to submit.

Example scenarios

Scenario 1: Shop with residence above

A borrower wants to buy a shopfront with a two-bedroom residence upstairs.

A mainstream residential lender declines because the property is mixed residential and commercial. A specialist lender considers it at a lower LVR after full valuation.

Scenario 2: Mixed-use zoning but normal home

A property is in a mixed-use zone but is used as a standard residence with no commercial lease or business fit-out.

The lender considers it because residential use is permitted and the valuation supports residential marketability.

Scenario 3: Home converted to clinic

A borrower wants to refinance a house that has been converted into consulting rooms.

The lender treats the property as business premises rather than standard residential security.

Scenario 4: Residential unit above retail strip

A borrower buys a residential apartment located above shops.

The lender accepts it because the security is a separate residential unit and not tied to the commercial premises.

Scenario 5: Related business pays rent

A company director owns a mixed-use property and leases the commercial part to their own business.

The lender asks for lease documents, business financials and accountant explanation to avoid double counting income.

Scenario 6: High-LVR mixed-use purchase

A first home buyer wants to buy a live-work property with 5% deposit.

The lender declines because the property does not fit standard low-deposit residential security policy.

So, can you get finance for a mixed-use property?

Yes, but the lender needs to accept both the property and the loan purpose.

The strongest applications usually have:

• clear residential use
• legal permanent occupancy
• acceptable zoning
• strong valuation
• conservative LVR
• clear residential and commercial split
• strong marketability
• complete lease documents
• clean borrower profile
• clear income evidence
• lender policy that accepts mixed-use security

The weakest applications usually involve mainly commercial use, restrictive zoning, specialised business fit-out, short-stay or management restrictions, poor marketability, high LVR, unclear lease income, related-party rent issues, incomplete documents or assuming residential lending will apply automatically.

Mixed-use property can be financed, but it is not a normal home loan scenario.

Need help getting finance for a mixed-use property?

A mortgage broker can help compare lenders that may consider mixed-use property, shop-and-residence security, commercial lease income, business-use property, specialist property security, company or trust borrowers, commercial property lending and residential lending where the property is still mainly residential.

We can review the property type, zoning, residential/commercial split, valuation risk, lease income, borrower structure, LVR, loan purpose and lender options before you apply.

If you are buying or refinancing a mixed-use property, speak with a mortgage broker before signing an unconditional contract or assuming a standard home loan will work.