Will the bank lend on this property?

Bayley Clarke · Mortgage broker on the road · Last checked 12 November 2026 · 7 min read

The short answer

Most of the time, yes. But the bank is lending against the property as much as against you, and some properties make it nervous: vacant land, big acreage, anything on wheels, very small units, and places no insurer will cover.

That rarely means a flat no. It usually means a bigger deposit, fewer lenders or a different kind of loan. The trick is finding out which bucket a property sits in before you sign, not after the valuer has been out.

The bank is lending on the security, not just you

Every home loan has two halves. Your income has to carry the repayments, and the property has to be something the bank could sell if it ever had to. Nobody buys planning for that, but the bank's whole risk setting hangs off one question: if we had to sell this tomorrow, how many people would want it?

A three bedroom house on a normal block has plenty of buyers. A bare block, a few hundred acres, a tiny home on a trailer or a studio in a building full of identical studios has fewer, and the bank prices that in with a lower maximum loan, a bigger deposit, fewer lenders, or a no. It's not about how nice the place is.

Send me the listing before you make an offer

Send me the link on a call and I'll tell you if a bank will touch it and what deposit it needs.

Book a 30 minute call Call 0437 189 939

No application, no credit check, nothing on your file. Just the numbers.

Vacant land: can I buy land now and build later?

Yes. Plenty of lenders will lend on vacant land, even with no plan to build. Land can't earn an income and you can't live on it, so the comfortable spot is a loan of around 80% of its value, which means bringing a 20% deposit plus stamp duty and costs. While you hold it, the repayments and council rates all go out with no rent coming back, so your income carries the lot: Can I buy vacant land with no intent to build?

Buying now and building later is fine too, but watch the government help. The 5% Deposit Scheme can be used on vacant land with a separate building contract, but the build contract has to be signed within six months of the loan settling. If you already own the land before you get a place in the scheme, you can't use it to build on that land. So a block bought with no build in sight generally needs the full deposit, or lenders mortgage insurance for the gap. When the build happens, the land loan rolls into a construction loan: Can I buy a block of land now and worry about the build later?

Already own a block and eyeing the next place? Keeping it can work with a guarantor and an income that carries both loans. If you'll never build, selling may leave one smaller loan: I already own a block of land with a mortgage on it. Should I sell it and use the money as my next deposit, or keep it and put less down?

Acreage home loans: is there a maximum number of acres?

There is, and it's measured on the whole title, not the bit around the house. Across the lenders I work with, up to about 50 hectares, roughly 123 acres, is everyday residential lending. Between 50 and 100 hectares a few will look at it case by case, usually with a bigger deposit and no lenders mortgage insurance, because the insurers tend to stop at 50 hectares too. Past 100 hectares, about 247 acres, nothing residential takes it. That's rural or specialist lending at a much lower share of the value.

No lender values the house and a few acres and ignores the rest. Where a big property only works on a smaller title, the usual path is excising a lot with the house on it, which is a council and solicitor job before it's a bank job. And if the land is a working farm that pays the bills, it's an agribusiness loan, not a home loan.

Tiny home finance and things on wheels

A tiny home on a trailer usually has a VIN or a rego number, so to a lender it's closer to a vehicle than a house, and only the land under it gets valued. That changes once it's permanently fixed to land you own, on stumps or a slab, with sewer, water and power connected and the wheels gone. Then some lenders will treat it as a home and lend against it. Until then, most people use a secured or unsecured personal loan.

The word you use matters too. Lenders run separate policies for prefab, modular and kit homes, for transportable or relocated homes, and for anything mobile, and plenty of people get told no because the build landed in the wrong bucket: Why won’t banks finance tiny homes?

Building new in the Northern Territory? First home buyer in the Northern Territory: should you build instead of buy?

Small units, and when the off the plan valuation comes in low

Some lenders are fussy about very small apartments, usually set by internal floor area, and about complexes or postcodes with a lot of the same stock. That can mean a bigger deposit or fewer lenders. It doesn't make a unit a bad first step. For a lot of first home buyers it's the right one: Can my first home be something cheaper, like a unit, instead of holding out for my forever home?

Off the plan has its own trap. You sign at today's price, the bank values the place when it's finished, and it lends on whichever number is lower. If it's short, try another valuer, then cash, borrowing more or a guarantor: Buying off the plan: what happens if the valuation comes in low at completion?

In a super fund, a commercial building with a flat attached knocks out most lenders, though a few will look at it: Can my SMSF buy a commercial building that has a residential unit attached?

Can't get home insurance? What that does to the loan

The bank needs building insurance in place by settlement, enough to rebuild. Expensive cover is your problem, not the bank's. Impossible cover is different: if no insurer will touch a place in a known flood zone, most lenders won't proceed. In a strata building it's the body corporate's policy they check. Anywhere with a flood, fire or cyclone history, get a quote before you offer: Can I get a home loan if home insurance is really hard to get or very expensive?

The honest part

Most stories I hear about a bank refusing a property weren't really about the property. They were about finding out too late, after the contract was signed, when the valuer, the insurer or a lender's policy turned up the problem. Ten minutes with the listing before you offer is a lot cheaper.

Will a bank touch it? Ask before you sign

Land, acreage, a kit home, a unit or a place that's hard to insure. Send me the listing on a call and I'll tell you where it sits.

Book a 30 minute call Call 0437 189 939

No application, no credit check, nothing on your file. Just the numbers.

Common questions about properties banks won't lend on

Can I get a home loan for vacant land?+

Yes. Plenty of lenders will lend on vacant land, even with no plan to build. Because land earns nothing and you can't live on it, most are happiest at a loan of around 80% of its value, so expect to bring a 20% deposit plus stamp duty and costs.

Can I buy land now and build later with the 5% Deposit Scheme?+

Only if the build is lined up. The scheme covers vacant land with a separate building contract, but that contract has to be signed within six months of the loan settling, and land you already own before getting a scheme place isn't eligible.

How many acres will a bank lend on?+

Up to about 50 hectares is standard residential lending at most lenders. A few go to 100 hectares case by case. Past that it's rural or specialist lending.

Can you get a home loan for a tiny home?+

Not while it's on wheels. On a trailer it's treated like a vehicle. Once it's permanently fixed to land you own with services connected, some lenders will lend against it as a home.

Can I get a home loan if I can't get home insurance?+

Expensive insurance won't stop the loan. Insurance you can't get at all usually will, because the bank needs building cover in place by settlement.

Next question

Why did the bank say no to my home loan?

If it was the property and not you, this is where the other reasons live.