The Five Most Common Property Lending Questions We Are Asked in 2026

Property lending has become more specialised. Two borrowers with similar incomes and properties can receive very different outcomes depending on how their income is earned, what they already own and how the proposed property will be used.

Here are five of the most common questions we are being asked by Australian property buyers, investors and business owners in 2026.

1. How do banks calculate self-employed income for a home loan?

Banks generally calculate self-employed income using personal tax returns, business financial statements and Notices of Assessment. Depending on the lender and the strength of the application, they may assess the latest financial year, average two years or use the lower of the two years.

The calculation is rarely as simple as taking the taxable income shown on a tax return.

A lender may also consider:

• Salary or director’s wages
• The borrower’s share of company or trust profits
• Retained profits available within a business
• Depreciation and other acceptable non-cash expenses
• Interest expenses that will cease after refinancing
• One-off or extraordinary business expenses
• Recent Business Activity Statements
• Whether income is stable, increasing or declining

Some lenders can work with one year of financial statements. Others may consider alternative income verification, such as BAS, business bank statements or an accountant’s declaration.

The right lender often depends on how the business income is structured, not just how much the business earns. Flexdoc specialises in residential property finance for self-employed borrowers and business owners.

2. How much deposit do you need to buy commercial property?

A commercial property buyer will commonly need a deposit of between 20% and 35% of the property’s value. The actual requirement depends on the property, location, tenant, lease, borrower and lender.

For example, a lender may be comfortable with a higher loan-to-value ratio for a standard warehouse in metropolitan Sydney than for a specialised hospitality property in a regional location.

The deposit is also not the buyer’s only cash requirement. Buyers may need to fund:

• Stamp duty
• Legal and valuation costs
• GST, where applicable
• Due diligence expenses
• Any difference between the purchase price and the lender’s valuation

A $1.5 million commercial property purchased with a 70% loan would require a $450,000 deposit before transaction costs. If the lender valued the property below the agreed purchase price, the buyer would need to cover that shortfall as well.

Commercial lending does not have one universal maximum LVR. The property type and quality of the transaction can be just as important as the borrower’s income.

For a more detailed breakdown, read What Is the Maximum LVR for a Commercial Property Loan?

3. How do banks calculate borrowing capacity for property investors with multiple properties?

Banks assess the entire portfolio, not just the next property being purchased.

They generally include a portion of the rent received from each investment property. This is sometimes called rental-income shading. The lender may then assess the existing debts using an interest rate higher than the borrower’s actual rate.

Borrowing capacity can also be affected by:

• Interest-only investment loans
• Remaining loan terms
• Credit-card limits
• Personal and car loans
• Properties held through companies or trusts
• Guarantees given for other debts
• Negative gearing treatment
• Changes in rent or recently completed renovations

This is why an investor can receive significantly different borrowing-capacity results from different lenders. Each lender has its own assessment method, rental-income treatment and policy for existing debts.

For investors with several properties, loan structure matters. Selecting a lender based only on the lowest advertised rate can reduce future borrowing flexibility.

4. Can you use equity in your home to buy commercial property?

Yes. Subject to credit approval, homeowners may be able to release equity from residential property and use it toward the deposit and costs of a commercial property purchase.

Usable equity is different from total equity.

For example, if a home is valued at $2 million and has a $900,000 mortgage, the owner has $1.1 million in total equity. If a lender permits borrowing up to 80% of the home’s value, potential usable equity would be approximately $700,000:

$2,000,000 × 80% − $900,000 = $700,000

That does not mean the borrower will automatically qualify to access the full amount. The lender must still assess income, existing commitments, the proposed commercial loan and the purpose of the equity release.

The residential equity facility and commercial property loan can sometimes be arranged through different lenders. Keeping the facilities separate may provide more flexibility and avoid giving one lender security over every property.

Using residential equity increases the debt secured against the home. The structure and risks should be understood before proceeding.

5. Are commercial property loans assessed on the borrower’s income or the property’s rent?

They can be assessed using the borrower’s income, the property’s rental income or a combination of both.

An owner-occupied commercial property loan is usually supported by the trading business’s financial performance. The lender may review revenue, profit, cash flow, existing business debts and the business’s ability to make the proposed repayments.

An investment commercial property loan will place more weight on the property’s lease and rental income. The lender may consider:

• The tenant’s quality
• Remaining lease term
• Rental amount
• Rent-review provisions
• Vacancy risk
• Property expenses
• The ratio of rental income to loan repayments

Some lease-doc loans can be assessed primarily against the rent generated by the property, with limited reliance on the borrower’s personal or business income. These loans still require an acceptable property, lease, tenant and repayment buffer.

The strongest loan structure depends on whether the property will be occupied by the borrower’s business, leased to an independent tenant or purchased with a mixed-use strategy.

You can learn more in our comparison of prime, alt-doc and lease-doc commercial property loans.

The lender should fit the borrower

Property lending is no longer a single comparison between interest rates. Income verification, ownership structures, existing property debt and the nature of the security can all change the outcome.

Flexdoc arranges residential and commercial property finance for borrowers whose circumstances may not fit a standard lending template. We compare lender policy, structure and borrowing capacity before recommending a suitable path.

Schedule a property finance consultation with Flexdoc to discuss your next purchase, refinance or property investment.

This article provides general information only and does not constitute financial, tax or legal advice. Lending criteria and product availability are subject to change.