Mixed-Use Property Loans

A mixed-use property earns from both commercial and residential space under one title or strata scheme. In practice, the properties we finance most often are:

• A shop or office at street level with one or more apartments above
• A professional suite or consulting room with an attached residence
• Live-work premises combining a trade space and living quarters
• A unit within a larger mixed-use strata complex

What matters to a lender is not the label on the listing but the commercial-to-residential split they assess. We've seen properties marketed as mixed-use that a lender treats as pure commercial once the numbers are run, which changes the LVR and the pricing. As a commercial loan broker with access to 60+ lenders, we know which ones genuinely understand these blended assets.

More than any other factor, because it decides whether you're assessed as a residential or a commercial borrower in the first place. We see lenders stop treating a property as residential-style once the commercial component passes roughly 25 to 30% of the floor area; beyond that, it's assessed as commercial, with commercial LVRs, pricing and lender criteria rather than residential ones. Within commercial lending, a reasonably balanced commercial-residential blend by value and income then tends to attract the best terms, because the lender sees a diversified asset rather than a single-use risk. The practical takeaway is the same either way: confirm how a lender will classify and split your property before you make an offer, not after.

Yes. You buy as an owner-occupier, run your business from the commercial space, and either live in or lease out the residential portion. Lenders assess your business serviceability alongside any residential rent, and owner-occupiers often access slightly better terms than investors on an equivalent property. It's one of the more common scenarios we structure.

If you're weighing whether to buy or keep leasing, our buy vs rent calculator compares the economics. Buying purely to lease both components? The commercial property investment loan path is the one to look at.

Mixed-use LVRs typically sit up to 70%, depending on the split, the strength of each income stream, and your borrower position. Within that, we see lender appetite move with the deal type:

• Balanced commercial-residential (owner-occupier): up to 70%
• Balanced commercial-residential (investor): up to 70%, tenant strength dependent
• Owner-occupier first-time buyer: around 65%
• Unit in a mixed-use strata complex: around 65%
• Commercial-heavy or unusual split: assessed as commercial, often lower

Mixed-use caps generally sit a little below what you'd see on a straight residential purchase, because the commercial component carries more risk in a lender's eyes. Use our borrowing capacity calculator above for an indicative position, and our commercial property loan interest rates page covers current pricing.

They shade them differently. Commercial rent and residential rent are not assessed at the same ratio when a lender works out serviceability, because they carry different vacancy and re-letting risk. We generally find residential rent treated a touch more favourably, while commercial rent depends heavily on the lease and the tenant covenant.

For owner-occupiers, your business income sits alongside the residential rent in the assessment. The practical upshot is that the face rent on a listing rarely equals the income a lender will actually credit you, so we run the shaded figures before setting expectations on borrowing power.

Yes. Major banks typically cap interest-only at three years, non-bank lenders often extend to five, and private capital can sometimes structure full-term interest-only. We see buyers use it to protect cashflow in the early ownership period, particularly where there's a fit-out or a gap before a tenant moves in. The trade-off is a higher overall interest cost across the loan. Our commercial property loan types page covers the structures available across the range.

Yes, and it's often worth doing once both components have an established trading history. After a year or two of steady commercial and residential income, lenders view the property as lower risk, which can open the door to a sharper rate, a higher LVR, or an equity release to fund your next purchase. We also see owners refinance off a private or non-bank facility onto mainstream terms once the property has seasoned.

The same classification rules still apply on a refinance, so the commercial-to-residential split and the strength of each income stream drive the new valuation. Our commercial property refinancing page covers when it stacks up and what to expect.

Lenders test whether the dwelling would stand on its own as security: whether it could be separately valued, separately let, and separately sold if the commercial side ever failed. It surprises buyers, who tend to assume the residential half is the easy part.

Where the dwelling can't, because it shares a single title with no separate access, isn't self-contained, or the zoning doesn't permit independent residential occupation, the lender treats the whole asset as the riskier commercial security and the LVR drops or the deal is declined. We tell clients to check separate access, self-contained facilities, title and zoning on the dwelling before they sign. Where it doesn't stack up cleanly, we know which lenders still take a sensible view of the blended asset.

When the property is a unit in a larger scheme, the body corporate health matters as much as the unit itself. Lenders look at the strata records, the financials, and whether there's a healthy sinking fund or major works pending. A scheme with weak financials or a special levy on the horizon can stall or sink an application.

We review the strata documentation early so any lender concerns surface while there's still time to address them, rather than at valuation.

GST on mixed-use property is genuinely complex, because the commercial and residential components are usually treated differently. Broadly, the commercial portion can attract GST on sale or lease, while residential premises are often input-taxed, but the detail depends on the property and how it's used.

This is firmly a question for your accountant rather than your broker, and we always recommend getting tax advice specific to your purchase. The ATO's guidance on commercial residential premises and GST is a useful starting point for understanding how the rules apply before you speak to your adviser.

You can, and for a clean, balanced, well-tenanted property your own bank may do a fine job. The reason to use a broker is that mixed-use is exactly the kind of deal where a single lender's view can be unhelpfully conservative, because not every lender understands or prices dual-income property well.

Our role is to match the deal to the lenders who actually write mixed-use, whether that's a major bank, a non-bank lender, or private capital, and to present the split, the income and any strata or title quirks in the way each lender wants to see them. On an unusual deal, that's often the difference between a knock-back and a competitive offer. You can book a free consultation to talk through your scenario.

A mixed-use application usually needs two sets of documents.

On the property side, we'll typically ask for:

• The sale contract
• Lease agreements and tenant details for any tenanted components
• Strata or body corporate records, where the property is in a scheme
• A recent valuation that addresses the commercial-to-residential split
• Evidence the residential portion can be separately accessed and occupied

On the borrower side, lenders generally want:

• A personal financial statement and recent tax returns
• Business financials and BAS statements for owner-occupier deals
• A property portfolio summary for investors
• Identification and company extracts where entities are involved

The exact list varies by deal and lender, so we provide a tailored checklist once we've talked through your scenario. For complementary funding around the purchase, our business loans range covers working capital and other structures for the period after settlement.

Settlement normally takes 14-26 days once finance is approved. The full end-to-end timeline, from application to approval, depends on the lender and the complexity of the split: as a guide we see major banks at 6 to 10 weeks, non-bank lenders at 4 to 6 weeks, and private capital moving fastest at 1 to 3 weeks. The biggest accelerators are clean documentation and a clear picture of the split and the income at submission. The most common delays come from strata documentation gaps and questions over whether the residential portion stands on its own, which is exactly why we get those sorted up front.