Aaron Whybrow explains that 100% commercial lending covers the purchase price only, not stamp duty, GST, or legal fees. These loans are typically short-term business loans requiring refinancing in 3 to 5 years, even if repayments are spread over longer periods.
100% lending on your commercial property. If you're an investor, you can buy a commercial property and have 100% funding from the bank. If you're a business owner and you want to buy your premises, you can have 100% funding from the bank. If you just want to support your business with an overdraft or a business loan supported by a property up to 100% of its value, you can do that too. Hey, it's Aaron from Strategic Mortgage Brokers. I've had a lot of people jump into my inbox recently. I've had a lot of advertisements saying 100% lending. Can't believe it. Can I get 105, can I get the stamp duty? Can I get all this other stuff? So just wanted to unpack it a little bit for you. So when you buy a property with 100% lending, especially with the promotion that's going out at the moment, and people have seen it from Westpac and St. George that you can borrow 100%, that is technically true. It's not true that you can fund the stamp duty or the GST if applicable, or the legal fees, you would have to either fund that or you would have to borrow that from another asset that you have. So that would technically get you up over the 100%, but with the 100%, you've still got to fund the stamp duty and the legal fees. The other thing that you have to be mindful of is whether you're buying it as a going concern or it's a brand new property and you have to pay the gst, so you have to factor that into the purchase price as well. The other thing you have to be mindful of too is that because it's a business loan and you would be paying a monthly repayment that's probably calculated as a repayment over say 25 years. But your loan term is restricted to say three to five years maximum. And at the end of the three to five years the bank will review how you are profitable, how you're going with the loan, how is the property, is the property still acceptable? And typically most of the time they would just extend the loan term. But in some small cases they may not like that and they may ask you to readjust the loan to be able to be within a better loan to value ratio. Or they may not like it at all and you'll have to refinance out. That's where the mortgage broker comes in. When you're looking at these 100% loans, you have to come after a mortgage broker that's accredited to do it, that can go through your specific circumstances and create the best way that's going to utilise your cash for stamp duty or GST or legals, plus the 100% lending. And what's going to happen and make a plan and some options, what's going to happen potentially in the four to five year mark so that you are protected and maybe you need Another lender, maybe St. George and Westpac will continue for you. So just want to put some detail around it. It's not as simple as just borrowing at 100%. You need to see a mortgage broker to go through the details and then away we go. Build that wealth. Build it through commercial, build it through residential. We're here to help.
