How to Secure the Best Home Loans for Apartments in Canberra

Canberra’s apartment market is booming, and whether you're a first-time buyer, seasoned investor, or looking to upgrade, understanding how to secure the best home loans for apartments is crucial. 

Mortgage brokers are the best people to help you find loans that fit your finances and property goals. They make things easier by breaking down loan options, comparing rates, and managing the paperwork. With their expertise in Canberra's market, you'll be in a better position to make informed decisions in financing your future apartment.

This guide covers everything you need to get the best deal on your apartment loan—from loan types and key requirements to practical tips that’ll help you lock in your dream property with confidence.

Understanding Home Loans for Apartments in Canberra

When applying for a home loan for an apartment in Canberra, you’ll find that the loan structure is similar to that of a house, but there are a few key differences. Lenders consider factors like apartment size, building type, and location more carefully because apartments, especially smaller ones like studio apartments, may pose higher risks compared to standalone homes.

For instance, many lenders require apartments to meet a minimum size—often around 40 square metres—to qualify for a standard loan. Strata title apartments, the most common form of ownership in apartment blocks, can also come with added costs like strata fees, which need to be factored into your overall budget.

Another factor is the level of risk lenders associate with apartments, particularly if they are in high-rise buildings or newly developed areas. This can sometimes lead to stricter deposit requirements or limited loan product options.

How Apartment Loans Differ from House Loans

While both apartments and houses are great property options, securing a loan for each comes with some differences. Here's what to expect with apartment loans compared to house loans:

Apartment Loans

• Stricter Lending Criteria: Lenders may view apartments, especially smaller units like studios, as higher risk. This can lead to stricter requirements for approval.
• Lower Loan-to-Value Ratio (LVR): You may need a larger deposit (around 20%) for an apartment loan, as lenders offer lower LVRs for apartments.
• Property Titles: Some apartments, such as those under company title or stratum title, may be harder to finance. However, most Canberra apartments under strata title are widely accepted by lenders.
• Strata Fees: Apartments come with regular strata fees that cover shared building maintenance. While these fees reduce personal upkeep costs, they can affect how much you can borrow.
• Rental Income Considered: If buying as an investment, lenders will take potential rental income into account, which can help strengthen your loan application.
• Great Investment Option: Apartments, especially in high-demand areas, can offer solid rental returns, making them an attractive option for investors.

House Loans

• More Flexible Lending: Houses are typically viewed as lower risk, which can mean fewer restrictions and easier approval.
• Higher Loan-to-Value Ratio (LVR): With a house loan, you can often secure a higher LVR, meaning you might only need a 10% deposit. However, Lenders Mortgage Insurance (LMI) applies if your deposit is under 20%.
• Freehold Title: Houses usually come with a freehold title, which is straightforward to finance and easier for lenders to approve.
• No Strata Fees: Houses don’t come with strata fees, but you’ll be responsible for all the maintenance and repairs yourself, which can be more costly in the long run.
• Rental Income Considered: Like apartments, rental income from a house can be factored into your loan assessment, though houses often don’t carry the same ongoing costs, such as strata fees.
• Steady Investment: Houses are traditionally seen as stable, long-term investments with fewer ongoing fees, often allowing for higher borrowing power.

Both options have their pros and cons, but whether you choose an apartment or a house will depend on your financial goals, living preferences, and long-term plans.

Canberra Real Estate Market Overview and Loan Availability

Canberra’s apartment market is thriving, making it an ideal location for both homebuyers and investors. With the median apartment price in 2025 sitting at around $595,000 (CoreLogic), the city offers a great balance of affordability and opportunity.

Apartments in Canberra also deliver attractive rental yields, averaging 4.8%, making them a solid investment option for those looking to grow their property portfolio.

Demand for off-the-plan and newly built apartments continues to surge, particularly in vibrant suburbs like Kingston, Braddon, and Civic. Whether you’re after a sleek studio apartment or a modern unit in a high-rise building, Canberra’s diverse apartment options cater to a wide range of buyers.

While lenders may favour buyers with strong credit scores and genuine savings, there are plenty of specialised lenders offering flexible loan products, especially for those interested in studio apartments or smaller units. This makes Canberra an exciting and accessible market for both homeowners and investors alike.

Types of Home Loans for Apartments

When financing an apartment in Canberra, there are several loan options available to suit different financial situations. Here are the most common types of home loans for apartment buyers:

Standard Variable Rate Loan

This loan comes with a variable interest rate that can change with the market. It often includes features like additional repayments and redraw facilities, offering flexibility to pay off your loan faster when you can.

Fixed Rate Loan

A fixed-rate loan keeps your interest rate steady for a set period (usually 1–5 years), ensuring your repayments remain the same during this time. This option is great for those who want stability and protection against rising interest rates.

Interest-Only Loan

Popular with investors, an interest-only loan allows you to pay only the interest for a specified period (typically up to 5 years). This reduces your monthly repayments during the interest-only term, but you won’t reduce the loan’s principal.

Guarantor Loan

If saving for a large deposit is difficult, a guarantor loan can help. With this option, a family member can offer the equity in their property as security, helping you avoid Lenders Mortgage Insurance (LMI) and secure a loan with a lower deposit.

Construction Loan

Designed for those buying an off-the-plan apartment or one that’s being built, a construction loan releases funds in stages as the development progresses. You’ll only pay interest on the funds you’ve drawn down until the building is complete.

Home Buyer Concession Scheme

Eligible first-time buyers in Canberra can benefit from the Home Buyer Concession Scheme. This scheme offers stamp duty exemptions or reductions for both new and established properties, including apartments. To qualify, buyers must meet certain income and residency requirements, and the property must be used as their principal place of residence.

Eligibility Criteria for Apartment Home Loans

Before applying for an apartment home loan in Canberra, it’s important to ensure you meet the basic requirements lenders look for. Below are the key criteria and essential documents needed for apartment home loan approval.

1. Apartment Type and Size: Lenders often require apartments to meet a minimum size—typically around 40 square metres for a standard loan. Smaller units, like studio apartments, may face stricter conditions or require a larger deposit. Some lenders may not finance units under this size threshold, so it’s critical to check the apartment’s square metres before applying.
2. Deposit Requirements: While a 10% deposit is generally required for apartment loans, many lenders prefer a 20% deposit to avoid Lenders Mortgage Insurance (LMI). Apartments are often considered higher risk, so a larger deposit can increase your loan approval chances and reduce overall costs.
3. Property Title: Most Canberra apartments are sold under strata title, which is widely accepted by lenders. However, if you're buying under company title or stratum title, the loan approval process may be more difficult, as these ownership structures carry more risk.
4. Financial Circumstances: Lenders will review your credit score, income, and genuine savings to assess your ability to repay the loan. They also evaluate your debt-to-income ratio to ensure you can comfortably service the loan. A strong financial profile with stable income and minimal debt will make your application more attractive.
5. Investment Considerations: For those buying an apartment as an investment property, lenders will factor in potential rental income when assessing your application. However, investment loans often come with stricter conditions and higher interest rates compared to loans for owner-occupiers.
6. Property Use: If you're purchasing the apartment as your primary residence, lenders tend to be more flexible with loan conditions. However, properties such as holiday apartments or student apartments may face additional scrutiny due to the higher level of risk associated with these property types.

Essential Documents for Your Apartment Loan Application

Having the correct documents ready is key to speeding up the loan approval process. Here’s what you’ll typically need:

• Proof of Identity: A current passport or driver’s licence.
• Income Proof: Recent payslips (usually the last 2–3), tax returns, and if self-employed, financial statements or BAS statements.
• Savings History: Bank statements showing your genuine savings and deposit amount.
• Expenses: A list of current living expenses, credit card statements, and any personal loan details.
• Property Details: A copy of the contract of sale for the apartment and any relevant information about the strata title or other ownership details.
• Rental Income (for investors): Evidence of current or expected rental income, such as a rental appraisal from a real estate agent.

By ensuring you meet these eligibility criteria and having the necessary documents ready, you’ll be well-prepared to apply for an apartment loan in Canberra. Working with a mortgage broker can help you navigate the specifics and ensure everything is in place for a smooth approval process.

7 Steps to Secure the Best Home Loan for Your Canberra Apartment

Securing the right home loan for your Canberra apartment can be a smooth process if you follow the right steps. Whether you're looking at high-rise apartments, studio apartments, or a 2-bedroom apartment, these steps will guide you through your loan journey and help you make the best decision.

1. Get Financial Advice

Start by seeking financial advice from an experienced mortgage broker. They can assess your situation and help you understand your borrowing capacity, factoring in your financial behavior and how much you can afford in loan repayments.

2. Understand Types of Properties and Loan Options

Different types of properties—such as residential property, city apartments, or high-rise apartments—may affect your loan terms and available financing options. Lenders also consider the size of apartments and often require a minimum of 40 square metres in size for a standard loan. 

3. Get a Pre-Approval

Securing a pre-approval is crucial before making an apartment purchase. This ensures you have a clear idea of your borrowing capacity and what you can afford based on current property prices. It will also allow you to confidently search for the right type of property, whether you're looking at a plan purchase or an established apartment.

4. Compare Competitive Interest Rates

Once you’ve chosen the type of loan that suits your needs, compare competitive interest rates from a range of lenders. Look at the comparison rate, which includes both the interest rate and any additional costs, to get a true sense of what your entire loan will cost. Consider rate home loans that offer flexibility, such as the option to make additional repayments.

5. Plan for Loan Term and Repayment Structure

The loan term and repayment structure are crucial. Choose a loan that fits your financial plan, whether it’s a shorter or longer loan term. Consider how often you’ll make payments—your statement frequency—to ensure it aligns with your budget. Look for loans with features like flexible repayments or the ability to make loan increases over time if your situation changes.

6. Factor in Additional Costs

Aside from the purchase price of your apartment, account for additional costs like stamp duty, legal fees, and strata fees (if applicable). These can impact your overall budget, so make sure you calculate all expenses when determining the size of your cash deposit and the overall cost of the loan. Don’t forget to factor in any risks, such as borrower defaults, and how this could affect your loan.

7. Get Formal Approval

After selecting a lender and settling on the best mortgage option, move forward with formal approval. Ensure that all your documents are in order, and that your apartment is an eligible property under common titles like strata title or real property.

Case Study: Securing a Loan for a Studio Apartment in Canberra

John and Sarah, a young couple, were keen to enter the property ladder but had limited savings. They decided to purchase a studio apartment in Canberra’s city centre, priced at $450,000. Their mortgage broker helped them secure a guarantor loan, reducing their deposit requirement to just 5%.

With their pre-approval in hand, they made an offer and successfully secured their apartment. Their loan was set up with a variable interest rate and allowed for additional repayments, giving them the flexibility they needed to manage their repayments over the long term.

FAQs

What’s the minimum deposit required for an apartment in Canberra? 

Typically, lenders require at least a 10% deposit, though a 20% deposit helps you avoid LMI.

Can I get a loan for a studio apartment in Canberra?  

Yes, but some lenders may require the apartment to meet a minimum size. Studio apartments below 40 square metres may be harder to finance.

Can I use rental income to help secure an apartment loan?  

Yes, rental income from an investment property can be used to help service your loan.

What’s a pre-approval?  

A pre-approval is a conditional offer from a lender, giving you a clear idea of how much you can borrow before formally applying for a loan.

What extra costs should I budget for when buying an apartment? 

In addition to the purchase price, you should factor in stamp duty, strata fees, legal fees, and LMI (if applicable).

 

Final Thoughts

Finding the best home loan for your Canberra apartment doesn’t have to be overwhelming. By understanding your loan options, knowing the specific criteria for apartment properties, and preparing all the necessary documents, you’ll be in a strong position to make the right choice.

Whether you're purchasing a studio, 2-bedroom apartment, or a high-rise unit, having the right team by your side makes all the difference.

If you're ready to take the next step or need expert advice on which loan suits your needs, Home Loan Brokers Canberra is here to help. Call us at 02 6173 6399 or visit Home Loan Brokers Canberra to speak with one of our experienced mortgage brokers. Let’s make your apartment dreams a reality!