Can I finance multiple dwellings on one title?

Properties with more than one dwelling on a single title, such as a duplex, a home with a granny flat, or a triplex, are popular for rental income or housing family. They can also complicate financing, because lenders treat them differently once the number of dwellings rises. Here is how it works.

One title, several dwellings

The issue is that the property has multiple separate dwellings but sits on one title, so it is financed as a single security. Lenders are comfortable with this up to a point, after which the property starts to look more like a small development than a home, and the lending changes.

Residential terms up to a threshold

Many lenders will finance a limited number of dwellings on one title, such as a duplex or a house with a granny flat, on standard residential loan terms. Below their threshold, the property is treated much like a normal residential security. The exact number allowed is set by each lender.

Above the threshold, it can be commercial

Once the number of dwellings exceeds a lender threshold, commonly more than two or three, the loan may be treated as commercial rather than residential, with different terms, deposit requirements and assessment. So the number of dwellings is the pivotal factor.

Thresholds vary by lender

Where lenders draw the line between residential and commercial treatment differs, with some comfortable with more dwellings on one title than others. A property that pushes one lender into commercial territory may sit within another lender residential policy, which is why the choice of lender matters.

Rental income treatment

For multi dwelling properties bought partly for income, how a lender treats the rental income from the additional dwellings matters too, and lenders shade rental income differently. The combination of the dwelling count and the income treatment shapes what you can borrow.

Granny flats and dual occupancy

A home with a granny flat or a dual occupancy is generally the most straightforward of these arrangements, since it is close to a standard home. The more separate, self contained dwellings there are, the more the property moves toward development style lending.

Match the property to the right lender

Because thresholds and treatment vary, the useful step is to match the specific property to a lender whose policy accepts it on the terms you want. A broker can identify which lenders will treat your multi dwelling property as residential, usually at no cost to you. This is general information, not advice.