High-density apartment home loans

High density is a lender classification, not one national building-size rule. A CBD address does not automatically mean every lender will refuse the unit. Check the full address, development and intended loan against the selected lender's requirements.

Say a lender already has a large number of home loans secured by apartments in one tower. If that building develops a serious defect or values fall, several of its loans can be affected at the same time.

So some lenders limit how much of the development they are willing to finance. Once that limit is reached, the next applicant can be perfectly acceptable and still receive a no for that address.

That does not automatically mean the building is defective or a bad purchase. It means the lender does not want more of its property risk sitting in the same place.

The frustrating part is you usually can't tell any of this from the listing. Westpac and St George give brokers access to development registers that can help flag a building and indicate the loan limit that may apply. Other lenders have postcode tools or publish general limits on lending in a development. I wouldn't assume those tools show exactly how much the bank has already lent in that building.

I can check the published rules and ask the lender to check the exact address. The information available can change, so I don't rely on a register alone for the lender's final answer. With some lenders, we may only get that answer once they've assessed the property.

Check the apartment, building, location and loan separately to find the reason for the decline.

Two lenders can use different definitions of high density. Some look at the number of floors or apartments. Others use a postcode category, an internal property code or a separate location guide. That means a lender can reduce the maximum loan or decline the property because of its location even when the apartment itself is a normal size.

Flood and bushfire are separate checks. They do not automatically mean every lender will reject the suburb. The concern will usually appear through the valuation, insurability or the lender's property-risk review. If the issue is flood risk, use the flood risk guide before relying on the pre-approval.

So "it is only a 3 storey building" is not enough to clear it. Equally, "it is a high rise" does not mean every lender will refuse it.

If the concern is the apartment's size, layout, title or use rather than the postcode, the apartment mortgage guide explains those checks in more detail.

This example only compares the figures shown. The valuation, mortgage insurance, buying costs and complete loan assessment can change the amount required.

This is the part a phrase like "70% maximum" hides. On a $700k apartment, a move from an expected 90% loan to 70% would increase the price contribution by $140k before costs.

A larger deposit may solve a maximum loan percentage. It does not solve a lender that has marked the building unacceptable, a unit below its minimum floor area or a development outside its current register.

I looked at how 10 lenders assess high density apartments. Their rules fall into 2 broad groups. The figures worth keeping visible are the dwelling count, floor count and internal area that decide whether the rule applies.

Lender guides: Westpac · St George · Commonwealth Bank · NAB · ANZ · Bankwest · ING · Macquarie · AMP · People First Bank

Lender rules checked 2 August 2026. A general starting-point view of the 10 lenders named above, not a ranking, a recommendation or credit advice. Lending policy changes without notice, and any loan is subject to the lender's own credit assessment and approval of your full application.

The important detail is that "exposure" does not mean the same thing everywhere. One lender may limit its total lending in a development. Another may limit how many apartments one borrower owns there. A third may be comfortable with the building but cap the loan because of the postcode or floor area.

If the bank has said it is already too exposed, send me the address and the exact reason it gave.

I cannot promise that a development limit will still be open at settlement. What I can do is check the published property rules, use any available address or postcode tool and ask the lender to check what it keeps internally.

Some address, postcode and development checks can be completed before an offer. I may still need the lender to check the exact address and confirm its current position on the building. A final valuation or exposure decision may still be needed, so the finance clause and advice from your solicitor or conveyancer matter.

Give the lender the full contract and details of any rebate, cashback, rental guarantee or incentive. APRA says developer discounts reduce the sale price rather than count as the buyer's deposit. The headline contract price may also differ from the sustainable resale value. See APRA's residential lending guidance.

For an off-the-plan purchase, ask again near settlement whether the lender accepts the completed building, what valuation is still required and whether your pre-approval is current. An early postcode check does not reserve lending capacity in the development.

The Australian Government 5% Deposit Scheme can help an eligible buyer purchase without paying lenders mortgage insurance. It does not require a participating lender to accept every property.

The apartment still needs to fit the lender's rules. Floor area, high density classification, postcode, development exposure, valuation and property use can still change the answer.

So check the buyer's scheme eligibility and the apartment's property rules before assuming a 5% deposit is enough for that address.

First, get the reason in writing or ask the broker to identify exactly why the property was declined. "We will not lend in this building" is not specific enough.