Short answer: You can take a second mortgage over an investment property, a commercial property or vacant land as easily as over your home, and many owners prefer to. The loan sits behind the existing mortgage on that property only, leaving your home and its loan out of the transaction entirely.
Why owners choose the investment property
When a business owner has more than one property, the family home is usually the one with the cleanest title and the simplest signing arrangements. It is also the one most people would rather not put into a business transaction, and that instinct is worth following where the numbers allow.
An investment or commercial property does the same job. The lender is looking at equity, position on the title and the exit, and none of those care whether anyone lives in the building. If the equity is there, the investment property works and the home stays out of the file entirely.
There is a practical advantage too. Investment and commercial properties often carry a smaller mortgage relative to their value than a family home does, particularly where they were bought years ago or partly paid down. That means more room under the combined LVR ceiling, which is what actually determines the loan size.
How different property types are treated
Speed and sizing vary by what the property is. None of these are unusual for us, but they do not all move at the same pace.
| Property type | How it is treated | Effect on speed |
|---|---|---|
| Residential investment | Standard security, top of the range | Usually a desktop valuation — fastest |
| Commercial — offices, retail, showroom | Common and straightforward | Desktop where the market is active, otherwise a full valuation |
| Industrial — warehouse, factory unit | Common, particularly in outer metropolitan corridors | Generally straightforward |
| Vacant land | Accepted, sized more conservatively | Usually needs a full valuation |
| Rural and semi-rural | Assessed case by case | Full valuation and more time, particularly further out |
| Specialised buildings | Case by case, depends on alternative use | Slower — value depends on who else could use it |
If you have a choice between two properties, this table is the argument for using the metropolitan one when the deadline is tight, even if the other has more equity in it.
Does a tenant change anything?
A tenanted property is entirely normal security and in most respects a lease is a positive. It demonstrates the property is income-producing and gives a valuer something concrete to work from.
What we will want to see is the lease itself, or at least its key terms: who the tenant is, what the rent is, how long it runs and what happens at the end. A long lease to a solid tenant on a commercial property supports the valuation. A property that is vacant, or between tenants, is still acceptable but is generally sized a little more conservatively.
Day-to-day, nothing about the arrangement changes. The tenant keeps paying rent to you under the same lease, and the loan is a matter between you and us.
Where a property is in a company or trust name, which is very common for investment holdings, the delay risk is signatories rather than the tenant. Two directors in two states is the single most frequent reason an otherwise same-day file becomes a two-day one.
What we need on an investment property
Slightly more than on an owner-occupied home, and all of it is paperwork you already have.
- The address and title details, so ownership and what is registered can be confirmed.
- A recent statement for the existing loan on that property, showing the current balance rather than the original amount.
- The most recent rates notice, which confirms ownership and gives useful context on the property.
- The lease, if it is tenanted, or a rental statement from the managing agent.
- Identification for every registered owner, plus the company or trust documents where the property is not held in personal names.
- Anything unusual on the title, mentioned early rather than discovered late. Old caveats and long-forgotten encumbrances are common on properties held for a long time.
A file over a commercial property
A Perth equipment hire business had won a twelve-month contract with a mining services group that required three additional machines on site within a month. The machines were available; the deposit was not, and the receivables from the existing contracts were on 45-day terms.
The directors owned their home, heavily mortgaged, and a light industrial unit in an outer suburb bought eight years earlier with a little under a third of its value still owing. The industrial unit had far more room under the ceiling, and using it meant the home never entered the transaction.
The property was tenanted to an unrelated business on a lease with three years to run, which helped the valuation. Ownership sat in a family trust with two directors, both in Perth, both available that day. The offer went out on the Wednesday and the loan settled on the Thursday.
The exit was the contract revenue over the following months. The machines were on site inside three weeks and the loan was repaid ahead of term.
Can I use a property held in a company or trust?
Yes, and it is more common than personal ownership for investment and commercial holdings. There is nothing unusual about it and it does not change the assessment.
What it changes is logistics. Every director or trustee who needs to sign has to be reachable on the day, and the constitution or trust deed has to permit the borrowing, which is usually a document we simply need to see rather than an obstacle.
The practical advice is the same every time: work out who has to sign before you work out anything else. A file where the equity is ample and the exit is obvious will still miss a Thursday deadline if one of two directors is on a plane. Confirming availability takes a phone call and it is the highest-value thing you can do on day one.
Frequently asked questions
Can I borrow against an investment property without touching my home loan?
Yes. The second mortgage is registered against that property only. The loan on your home, and the home itself, are not part of the transaction.
Does the property need to be tenanted?
No. A tenanted property is straightforward and a lease helps the valuation, but vacant and between-tenant properties are accepted as well.
Can I use vacant land as security?
Yes, though land is sized more conservatively than a built property and usually needs a full valuation, which adds days.
What if the property is in a company or trust name?
Entirely normal. We will need the company or trust documents and every required signatory available on the day, which is usually what decides the timeline.
Can I use more than one property?
Yes. Where one property does not support the amount needed, taking security over two is routine and the combined LVR calculation runs across both.
Does it cost anything to apply?
No. There's no cost to apply or check your eligibility. All costs are set out in writing in your loan offer before you sign anything.
Will checking my eligibility affect my credit score?
No. Our 60-second eligibility check doesn't make a credit enquiry. A credit check is only done later, with your consent, if you decide to proceed.
