More than half of Birchgrove’s homes are semis or terraces, over four times the NSW share, and four in ten are owned outright.
The trust deed or company constitution, the entity’s financial statements, and personal guarantees from the trustees or directors. Fewer lenders lend to trusts and companies, and some cap the loan lower. Settle the structure with your accountant before pre-approval, since changing it later is costly.
Attached homes are a big part of Birchgrove, at 53.0% against 11.7% statewide. Whether a townhouse sits on its own title or inside a strata scheme changes how a lender treats it, so check the contract. Birchgrove is small, at 1,500 private dwellings, so comparable sales are thin and a valuation can be harder to predict.
Separate housesTownhouses and semisApartments
apartments NSW 21.7%
separate houses NSW 65.6%
terraces and semis NSW 11.7%
rented NSW 32.6%
with a mortgage NSW 32.5%
private dwellings
Source: ABS Census 2021, Suburbs and Localities (SAL10373).
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When a trust or company buys a property, the loan is made to that entity, and the lender looks through it to the people behind it.
Expect to provide the trust deed or company documents, and expect the directors or trustees to guarantee the loan personally. Income is usually assessed across the entity and the individuals together.
Not every lender offers loans to trusts and companies, and those that do often apply different limits.
The structure also changes tax, stamp duty and land tax outcomes, which are questions for your accountant and solicitor. The lending question is which lenders fit the structure they recommend. Complex lending in detail
Charles Touma, Mortgage Broker.
Birchgrove is about five kilometres west of the city, in Inner West Council, and Balmain is its only neighbouring suburb. It shares postcode 2041 with Balmain and Balmain East, and includes Yurulbin Point and Ballast Point, both former industrial sites that are now public parks.
Birchgrove ferry wharf has services to Circular Quay and Cockatoo Island, and the Balmain Sailing Club runs the annual Balmain Regatta, first held in 1849.
A discretionary family trust borrows through its trustee, which may be an individual or a company. The lender needs the trust deed to confirm the trustee has power to borrow and mortgage property, and it usually wants the individuals involved to guarantee the debt.
Where the trust’s income comes from a business, recent financial statements and tax returns form part of the assessment.
A company can borrow to buy property, with its directors usually giving personal guarantees. The lender assesses the company’s financials and the guarantors’ position together.
Some lenders apply lower maximum loan-to-value ratios to company borrowers, so the deposit may need to be larger than for the same purchase in personal names.
For a home you live in, buying in your own names is usually simpler, and it keeps access to owner-occupier loans and concessions where you are eligible.
For an investment, a trust or company can have advantages, but it also brings costs and paperwork every year.
If a structure is being chosen mainly to borrow more, it rarely helps, because lenders look through to the same people and incomes either way. The right starting point is what the property is for and who should own it. Investment loans explained.
Three ways a Birchgrove property can be owned, and what each means for the loan.
The groundwork that stops a structure from holding up settlement.
Yes, through its trustee, though fewer lenders offer it and conditions differ. The trust deed needs to allow the trustee to borrow and mortgage property, and the individuals involved usually guarantee the loan. Expect the lender to assess the trust’s income and the guarantors’ finances together.
Almost always. Lenders look through the entity to the people who control it, so directors of a corporate trustee, or individual trustees, are generally asked for personal guarantees.
That puts your own assets and income into the lender’s security and assessment, which is why independent legal advice before signing is standard.
It can own a home, but it changes a lot. First home concessions and government schemes are generally designed for individuals buying a home to live in, and a trust purchase usually falls outside them.
There can be tax and land tax consequences as well. For a home you live in, personal names are usually simpler, but that is ultimately a question for your accountant.
Often, yes. Some lenders cap company and trust loans below what they offer individuals, and mortgage insurance is not always available for entity borrowers. In practice that can mean a larger deposit for the same property. The difference varies by lender, which is why the choice of lender matters here.
The trust deed and any amendments, details of the trustee and beneficiaries, recent financial statements and tax returns for the trust and any business it runs, and identification and income evidence for each guarantor. If the trustee is a company, its registration details are needed too. Having these ready before you sign a contract saves time.
Usually not. Lenders assess the same people and incomes whether the property is owned personally or through an entity. A structure can have genuine tax or asset-planning benefits, but using one mainly to increase borrowing rarely works.
One free call covers what you could borrow in Birchgrove, the lenders that suit the property you want and the order to do things in.
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General information only, not credit or financial advice. Lender policies and government scheme criteria differ and change over time. All lending is subject to individual assessment and approval.
