Can a Unit Trust or Discretionary Trust Get a Home Loan?

Using a Unit Trust or Discretionary Trust to Get a Home Loan

Yes, a unit trust or discretionary trust may be able to get a home loan in Australia, but trust lending is more specialised than a standard personal home loan.

Some lenders accept trusts. Some only accept certain trust types. Some require corporate trustees. Some require all trustees, directors, unit holders or beneficiaries to provide guarantees. Some lenders restrict trusts to investment lending only. Others may not accept trusts at all, or may only consider them through business, private bank or specialist lending channels.

The main challenge is that a trust is not a simple individual borrower. A lender needs to understand the trustee, trust deed, beneficiaries, unit holders, appointors, income, distributions, guarantees, property use, tax position and whether the structure fits the lender’s policy.

This guide explains how Australian lenders may assess unit trusts, discretionary trusts, family trusts and corporate trustee structures for residential home loans, based on current policy research.

Can a trust get a home loan?

Yes, some trusts can get a home loan.

A lender may consider a trust borrower if:

• the trust type is acceptable
• the trustee is acceptable
• the trust deed allows borrowing
• the trustee has power to mortgage property
• the trust is not an SMSF, unless using SMSF-specific lending
• the property is acceptable security
• the loan purpose is acceptable
• serviceability can be proven
• personal guarantees are available where required
• the deposit source is clear
• tax and legal advice has been considered

Trust lending is very lender-specific. One lender may accept the structure, while another may decline it immediately.

What types of trusts may lenders consider?

Depending on the lender, possible trust structures may include:

• discretionary trusts
• family trusts
• unit trusts
• fixed trusts
• hybrid trusts
• bare trusts
• corporate trustee structures
• individual trustee structures
• investment trusts
• property holding trusts

Not every trust type is accepted by every lender.

Some lenders are comfortable with discretionary or family trusts but not unit trusts. Others may accept unit trusts but require unit holder guarantees. Some may exclude hybrid trusts. SMSF trusts are usually assessed under separate SMSF lending policy.

Is a discretionary trust the same as a family trust?

A family trust is usually a type of discretionary trust.

In a discretionary trust, the trustee has discretion over how income or capital is distributed among eligible beneficiaries.

A family trust is commonly used for family wealth, investment or business structuring.

For home loan assessment, lenders may refer to:

• discretionary trust
• family trust
• discretionary family trust
• trust with corporate trustee
• trust with individual trustee

The exact wording matters because lender policy may list acceptable trust types specifically.

What is a unit trust?

A unit trust is a trust where ownership interests are divided into units.

Unit holders usually have fixed entitlements based on the number and class of units they hold.

A lender may ask:

• who are the unit holders?
• what percentage does each unit holder own?
• are units ordinary, special or different classes?
• are unit holders also directors or trustees?
• do all unit holders need to guarantee?
• does the trust deed allow borrowing?
• can income be distributed in line with unit holdings?

Unit trusts are common for investment arrangements involving multiple parties, but they can be more complex than a simple family trust.

Can a discretionary trust buy residential property?

Yes, a discretionary trust may be able to buy residential property if the lender accepts the trust structure.

The property may be:

• an investment property
• a residential rental property
• a property held for family wealth planning
• a property held by a corporate trustee
• a property held by individual trustees
• a property connected to a broader business or family structure

However, if a beneficiary or related party will live in the property, the lender may need to assess the purpose and occupancy carefully.

Can a unit trust buy residential property?

Yes, a unit trust may be able to buy residential property with the right lender.

A lender may assess:

• the trust deed
• trustee structure
• unit holders
• unit holder guarantees
• ownership percentages
• income distributions
• rental income
• serviceability support
• deposit source
• property use
• LVR

Unit trusts can be useful where unrelated parties hold defined interests, but they often require more documentation and more careful guarantee assessment.

Do all lenders accept trusts?

No.

Trust borrower policy varies widely.

Some lenders accept trusts as borrowers.

Some only accept trusts in specific circumstances.

Some limit trust lending to discretionary, family or unit trusts.

Some only accept individual trustees.

Some only accept corporate trustees.

Some do not accept company or trust borrowers.

Some lenders require trust borrowers to be managed through a business or private banking channel.

Some lenders may have paused new lending to trusts or limited the products available.

This is why trust lending should be checked before signing a contract.

Why are trust loans more complex?

Trust loans are more complex because the lender needs to know who is legally responsible and who benefits from the property.

The lender may need to assess:

• trustee
• beneficiaries
• unit holders
• appointor
• company trustee
• directors
• shareholders
• trust deed
• trust amendments
• trust income
• distributions
• personal guarantees
• company guarantees
• related entities
• loan purpose
• property use
• tax position

A trust is a legal structure, not a natural person. The lender must understand the whole structure.

Who is the borrower in a trust home loan?

The borrower is usually the trustee, acting in its capacity as trustee for the trust.

For example:

• ABC Pty Ltd as trustee for the ABC Family Trust

or

• John Smith and Jane Smith as trustees for the Smith Family Trust

The trust itself is not usually the legal owner in the same way an individual is. The trustee holds assets on behalf of the trust.

This is why the loan documents need to be prepared correctly.

What is a trustee?

A trustee is the legal person or company that manages the trust.

The trustee may be:

• an individual
• multiple individuals
• a company
• a corporate trustee

The trustee is responsible for entering contracts, holding property, borrowing money and acting according to the trust deed.

A lender must verify that the trustee has authority to borrow and mortgage property.

What is a corporate trustee?

A corporate trustee is a company that acts as trustee of a trust.

For example:

• Smith Holdings Pty Ltd as trustee for the Smith Family Trust

Corporate trustees are common because they can simplify administration and asset separation.

However, the lender will still need to assess the company, directors, shareholders, trust deed and guarantees.

A corporate trustee loan is not the same as an ordinary company borrower loan.

What is an individual trustee?

An individual trustee is a person who acts as trustee of the trust.

For example:

• John Smith as trustee for the Smith Family Trust

Some lenders accept individual trustees. Others prefer or require corporate trustees.

The lender may need all individual trustees to be parties to the loan, provide identification, sign documents and provide guarantees where required.

Is a corporate trustee better than an individual trustee?

Not always.

A corporate trustee may be better for some legal or tax planning purposes, but it can add documents and lender checks.

A lender may need:

• ASIC company extract
• company constitution
• director details
• shareholder details
• company registration details
• trust deed
• trust amendments
• director guarantees
• beneficial ownership details

An individual trustee may be simpler in some cases, but legal and tax advice should guide the structure.

Does the trust deed matter?

Yes, the trust deed is critical.

A lender will usually need to review the trust deed to confirm that the trustee has power to:

• buy property
• borrow money
• grant a mortgage
• provide security
• receive income
• distribute income
• appoint trustees
• amend the trust
• deal with beneficiaries or unit holders

If the trust deed does not allow the proposed borrowing or property purchase, the lender may not proceed until legal issues are fixed.

What if the trust deed is missing?

This can delay or stop the application.

A lender will usually not rely on a trust structure without reviewing the trust deed.

If the deed is missing, you may need legal advice to:

• locate the deed
• reconstruct the deed
• confirm trustee powers
• prepare statutory declarations
• amend or restate the deed, if possible

Trust deed issues should be resolved before applying for finance.

What if the trust deed has amendments?

Provide all amendments.

A lender usually needs:

• original trust deed
• all variations
• deeds of appointment
• deeds of retirement
• trustee changes
• appointor changes
• unit holder changes, if relevant
• supplemental deeds
• legal review confirmation, if needed

Missing amendments can cause approval delays.

What if the trustee changed?

A trustee change must be documented.

The lender may ask for:

• deed of appointment
• deed of retirement
• ASIC update, if corporate trustee
• minutes or resolutions
• updated trust records
• evidence current trustee has authority
• legal confirmation, where needed

The borrower on the loan must match the current trustee.

What if the appointor changed?

The appointor is important because they may have power to appoint or remove the trustee.

A lender may ask:

• who is the appointor?
• has the appointor changed?
• are documents current?
• does the appointor control the trust?
• are there succession issues?
• does the trust deed give the appointor special powers?

Appointor details help the lender understand control.

What is a beneficiary?

A beneficiary is a person or entity that may benefit from a trust.

For a discretionary trust, beneficiaries may include a broad class of family members or related entities.

For lending, the lender may ask:

• who are the primary beneficiaries?
• are the borrowers beneficiaries?
• will beneficiaries occupy the property?
• do beneficiaries need to guarantee?
• are distributions being used for income?
• are beneficiaries minors?

Beneficiary details can affect both income and guarantees.

What is a unit holder?

A unit holder owns units in a unit trust.

The lender may ask:

• who are the unit holders?
• how many units do they hold?
• what percentage does each hold?
• are units held by individuals, companies or trusts?
• do all unit holders need to guarantee?
• are units partly paid or fully paid?
• are there different classes of units?

Unit holder structure can affect serviceability and guarantee requirements.

Do all unit holders need to guarantee?

With some lenders, yes.

Based on current policy research, some lender policy requires personal guarantees from directors and unit holders of unit trusts.

This means a unit trust with several unit holders may require several people to provide guarantees.

That can create problems if:

• one unit holder refuses to guarantee
• one unit holder has bad credit
• one unit holder lives overseas
• one unit holder has no income
• one unit holder is another company or trust
• unit holders are unrelated investors

Unit trust guarantee requirements should be checked early.

Do beneficiaries need to guarantee?

Sometimes.

A lender may require guarantees from beneficiaries if their income is being used, if they control the trust, or if policy requires it.

A lender may ask:

• who benefits from the trust?
• whose income supports the loan?
• who controls the trust?
• who will occupy the property?
• who receives distributions?
• who should guarantee?

Some lenders may only require trustees and directors. Others may require beneficiaries or unit holders as well.

Do directors of a corporate trustee need to guarantee?

Often, yes.

If the trustee is a company, the lender may require personal guarantees from the company’s directors.

The lender may ask:

• who are the directors?
• are all directors guaranteeing?
• are any directors passive?
• are any directors overseas?
• do any directors have credit issues?
• are directors also beneficiaries or unit holders?

If all directors must guarantee, director selection matters.

What is a personal guarantee in trust lending?

A personal guarantee means an individual agrees to be personally liable if the trust or trustee does not repay the loan.

This is a serious legal obligation.

A guarantor may be responsible for the full debt, depending on the guarantee wording.

Before signing, guarantors should obtain independent legal advice.

What is a limited guarantee?

A limited guarantee caps the guarantor’s exposure to a set amount.

For example, the guarantee may be limited to a percentage of the loan or a specific dollar amount.

Not all lenders offer limited guarantees for trust loans.

Some require full or unlimited guarantees from directors, trustees, unit holders or beneficiaries.

Guarantee terms must be checked in the lender’s documents.

What is an unlimited guarantee?

An unlimited guarantee can expose the guarantor to the full debt and related costs.

Some lender policies require unlimited joint and several guarantees for company or trust borrower loans.

This means each guarantor may be pursued for the whole debt if the borrower defaults.

Legal advice is essential before signing.

Can a trust get an owner-occupied home loan?

Sometimes, but this can be difficult.

A trust does not personally live in a property. Individuals do.

Some lender policy allows owner-occupied loans in a trust name only if the beneficiaries occupy the property rather than the trustees.

Other lenders may restrict owner-occupied trust loans or decline them.

A lender may ask:

• who will live in the property?
• are they beneficiaries?
• are they trustees?
• is rent being paid?
• is the loan for personal or investment purpose?
• is the product suitable?
• does the trust deed allow the arrangement?

Trust owner-occupied lending needs careful policy review.

Can a trust get an investment home loan?

Yes, this is more common.

A trust may buy a residential investment property if the lender accepts the trust.

The lender may assess:

• rental income
• trustee structure
• guarantees
• trust income
• beneficiaries or unit holders
• company documents
• deposit source
• trust deed
• LVR
• property security

Investment trust lending is generally easier to place than trust owner-occupied lending.

Can a trust buy a property for a beneficiary to live in?

Possibly, but it is sensitive.

A lender may ask:

• is the occupant a beneficiary?
• is the loan owner-occupied or investment?
• is rent being paid?
• does the trust deed allow the property use?
• are there tax implications?
• are there land tax implications?
• do the occupants need to guarantee?
• does the lender accept related-party occupancy?

This should be checked before signing a contract.

Can a trust buy a property for a trustee to live in?

This can be more difficult.

Some lender policy distinguishes between beneficiaries occupying the property and trustees occupying the property.

If the trustee personally lives in the property, the lender may question the purpose, borrower structure and regulatory treatment.

Legal, tax and lending advice should be obtained before pursuing this structure.

Can a trust use rental income?

Yes, if the property is rented or will be rented.

A lender may ask for:

• current lease
• rental appraisal
• property management statement
• rental history
• related-party rental explanation
• vacancy allowance
• trust tax return, if existing property
• bank statements showing rent, if applicable

Rental income may be shaded according to lender policy, just like individual investment loans.

Can a trust use beneficiary income?

Sometimes.

If the trust is not self-supporting, a lender may look to the income of trustees, directors, beneficiaries or unit holders.

Based on current policy research, some lender policy indicates that it is typically preferable for the trust to be self-supporting, but serviceability support can be sought from the trustee, director or beneficiary where necessary. Supporting individuals may need to be debtors or guarantors.

This means personal income support can help, but the individuals may take on legal obligations.

Can a trust use unit holder income?

Sometimes.

A unit trust may rely on unit holder income if the lender accepts the structure and the unit holders provide support or guarantees.

The lender may assess:

• unit holder income
• unit holder debts
• unit holder ownership percentage
• guarantee obligations
• trust income
• rental income
• distributions
• existing commitments
• living expenses

If there are multiple unit holders, the income and liabilities need to be attributed correctly.

Can a trust use company income?

Possibly, depending on the structure.

If a company is trustee, beneficiary, unit holder or related trading entity, the lender may need to understand how income flows.

The lender may ask:

• which entity earns the income?
• which entity owns the property?
• which entity is borrowing?
• which entity distributes income?
• are there inter-entity loans?
• who guarantees the debt?
• are financials available?

Company and trust structures can become complex quickly.

Can a trust use trust distributions as income?

Yes, trust distributions may be used in some cases.

A lender may ask for:

• personal tax returns showing distributions
• trust tax returns
• trust financial statements
• distribution statements
• evidence income is ongoing
• trustee confirmation
• beneficiary details
• ownership or control explanation

Some lender policy treats trust distributions differently depending on whether the borrower is merely a beneficiary or controls the trust.

What if the borrower is only a beneficiary?

This can be simpler for investment income assessment.

Some lender policy distinguishes between a customer who is a beneficiary only, and a customer who is trustee or shareholder of the trustee company.

Where the customer is beneficiary only and not in control of the trust, trust distributions may be treated as investment income if received for a required period.

Where the customer controls the trust, the income may need to be assessed under self-employed or business income rules.

What if the borrower controls the trust?

If the borrower controls the trust, the lender may assess the income as self-employed or business income rather than passive investment income.

The lender may require:

• trust tax returns
• trust financial statements
• personal tax returns
• notices of assessment
• company trustee documents
• business liabilities
• distribution history
• accountant explanation

Trust income is more complex where the borrower controls the entity.

Can discretionary trust distributions be used?

Yes, but they need careful treatment.

A discretionary trust distribution may be accepted if it is shown in tax returns and the lender is comfortable that the income is ongoing.

The lender may ask:

• who controls the trust?
• is the borrower trustee or beneficiary?
• are distributions regular?
• are they discretionary?
• can the trustee make income available to the borrower?
• are financials available?
• are there other beneficiaries?
• is the income already counted elsewhere?

Discretionary distributions are not as straightforward as PAYG wages.

What if the trustee can redirect distributions?

Some lender policy may allow discretionary trust distributions where the trustee or director of the trustee company undertakes to make income available to the trustee or borrower.

The lender may require additional information, such as a record of discussion confirming:

• the borrower is trustee or controls the trustee
• the borrower has discretion under the trust
• distributions can be directed to the borrower
• the income is available to support commitments

This is lender-specific and should be documented correctly.

Can unit trust distributions be used?

Yes, if the applicant receives distributions and the lender accepts them.

The lender may ask for:

• unit trust tax return
• unit holder statement
• personal tax returns
• distribution history
• unit ownership percentage
• trust deed
• financial statements
• whether distributions are ongoing

Unit trust distributions may be more predictable than discretionary trust distributions if unit entitlements are fixed, but evidence is still required.

What if distributions go to children?

Distributions to children can create a lending issue.

If income is distributed to minors or non-borrowing family members, the lender may not automatically use it for serviceability.

Some policies may allow certain distributions from a discretionary family trust to children under 18 to be added back, but this is technical and lender-specific.

The lender must avoid using income that is not available to the borrowers.

What if the trust has business income?

If the trust operates a business, the lender may assess it as self-employed income.

They may request:

• trust tax returns
• financial statements
• profit and loss
• balance sheet
• BAS statements
• business bank statements
• accountant letter
• business debt schedule
• ATO account statement
• trustee company documents

A trust that runs a business is more complex than a passive property trust.

What if the trust only holds investments?

A passive investment trust may be easier to assess.

The lender may review:

• rental income
• dividend income
• managed fund distributions
• trust tax return
• distribution history
• property debts
• trustee details
• trust deed
• guarantor income

Passive investment trusts may still need guarantees, but business income assessment may be simpler.

Can a trust get a low-deposit home loan?

Sometimes, but options may be limited.

Trust borrower loans often have lower maximum LVRs than individual loans.

Some lenders cap non-individual borrowers at 80% LVR.

Some do not allow lenders mortgage insurance for trust borrower structures.

Some first-home buyer and professional waiver policies are not available to trusts.

If a trust is borrowing, assume a larger deposit may be required unless a lender confirms otherwise.

Can a trust borrow above 80% LVR?

It may be possible with a limited number of lenders, but many trust loans are restricted to 80% LVR or lower.

Higher LVR trust loans may face:

• fewer lenders
• LMI restrictions
• stricter guarantees
• more income evidence
• more legal review
• higher pricing
• tighter property rules
• fewer product options

Check this before committing to a trust purchase.

Can a trust use lenders mortgage insurance?

Sometimes, but not always.

Some mortgage insurers or lender policies may not accept trust borrowers.

Even if a lender accepts trusts at 80% LVR, they may not allow trusts above 80% with LMI.

A trust borrower should not assume the same LMI options as an individual borrower.

Can a trust use a professional LMI waiver?

Usually, this is limited.

Some professional LMI waiver policies do not apply to loans in a company name, family trust or unit trust.

Even if the director, trustee or beneficiary is an eligible professional, the waiver may not be available if the borrower is a trust.

This can materially affect deposit requirements.

Can a trust use the First Home Guarantee?

Usually, no.

First-home buyer schemes are generally designed for individual applicants, not companies or trusts.

Some lender policy specifically excludes loans with a company or trust borrower from First Home Guarantee-type schemes.

If you are a first-home buyer, buying through a trust may affect eligibility for:

• First Home Guarantee
• First Home Owner Grant
• stamp duty concessions
• state-based first-home buyer schemes
• owner-occupier benefits

Always obtain legal and tax advice before using a trust for a first home purchase.

Can a trust get interest-only repayments?

Possibly.

Trust borrowers often use interest-only loans for investment property.

A lender may assess:

• investment purpose
• rental income
• trust income
• guarantor income
• interest-only term
• remaining loan term
• LVR
• exit strategy
• property type
• product restrictions

Interest-only trust lending is possible, but not every lender or product will allow it.

Related research: Can You Get an Interest-Only Home Loan in Australia?

Can a trust refinance an existing property?

Yes, if the new lender accepts the trust structure.

A lender may ask for:

• existing loan statements
• repayment history
• trust deed
• trustee details
• guarantees
• property title details
• rental evidence
• trust tax returns
• financial statements
• cash-out purpose, if any
• ATO position, if relevant

Refinancing trust-held property can be more document-heavy than refinancing personally held property.

Can a trust refinance from one trustee to another?

This can be complex.

If the trustee has changed, the lender may need to verify:

• current trustee appointment
• old trustee retirement
• title ownership
• trust deed powers
• legal continuity
• ASIC records, if corporate trustee
• consent from relevant parties
• guarantees from new directors or trustees

A trustee change should be handled carefully with a solicitor.

Can a trust refinance and cash out?

Sometimes, but cash out can be restricted.

A lender may ask:

• what is the cash-out purpose?
• is the cash out for the trust?
• is it for beneficiaries?
• is it for investment?
• is it for business use?
• is it for personal use?
• does the trust deed allow it?
• does the LVR fit policy?

Trust cash out is more sensitive than standard personal cash out.

Related research: Can You Refinance to Buy Out an Ex-Partner?

Can a trust consolidate debt?

Possibly, but debt consolidation in a trust structure needs care.

A lender may ask:

• whose debt is being consolidated?
• is the debt in the trust name?
• is it a trustee debt?
• is it a beneficiary debt?
• is it a director debt?
• is it business or personal?
• does the trust deed allow the purpose?
• is the refinance responsible?

Using trust property to pay personal debts can be difficult and may have tax and legal consequences.

Can a trust pay out personal debts?

This is sensitive.

If a trust loan is used to pay personal debts of beneficiaries or directors, the lender may question the loan purpose.

The lender may ask:

• why is trust borrowing used for personal debts?
• is the beneficiary receiving a distribution or loan?
• are there tax consequences?
• does the trust deed permit it?
• are guarantors personally liable?
• is the purpose acceptable under residential policy?

This should be reviewed before applying.

Can a trust refinance business debt?

Possibly, but this may become business or commercial lending.

A lender may ask:

• what business debt is being refinanced?
• which entity owes the debt?
• does the trust own the business?
• is the property residential security?
• will the business debt be closed?
• is the loan purpose acceptable?
• is commercial lending more appropriate?

Refinancing business debt through trust-owned residential property is not always accepted.

Related research: Can You Refinance Business Debt into a Home Loan?

Can a trust buy vacant land?

Some lenders may consider trust borrowers buying vacant residential land, but policy can be restrictive.

The lender may assess:

• land zoning
• location
• intent to build
• construction timeframe
• LVR
• trust structure
• loan purpose
• exit strategy
• whether the trust is investment-only

Vacant land is already more policy-sensitive than an established dwelling. A trust borrower can further narrow options.

Related research: Can You Use a Bridging Loan to Buy Vacant Land in Australia?

Can a trust get a construction loan?

Sometimes.

Trust construction loans may require:

• trust deed review
• fixed-price building contract
• council-approved plans
• builder details
• progress payment assessment
• funds to complete
• guarantor income
• rental or investment purpose
• valuation on completion
• acceptable trustee structure

Some lenders may not offer construction loans to trust borrowers.

Can a trust buy an off-the-plan property?

Possibly.

The lender may assess:

• trust borrower policy at settlement
• contract in the correct trustee name
• deposit source
• valuation at completion
• guarantee requirements
• trust deed currency
• LVR
• property type

Off-the-plan purchases can be risky if lender trust policy changes before settlement.

Can a trust buy an apartment?

Yes, if the lender accepts both the trust borrower and the apartment security.

The lender may assess:

• apartment size
• high-density restrictions
• postcode limits
• strata position
• valuation
• rental demand
• trust structure
• LVR

The trust structure does not override normal property security rules.

Can a trust buy rural residential property?

Possibly, but options may be narrower.

The lender may assess:

• land size
• zoning
• property use
• marketability
• dwelling type
• whether income is agricultural or passive
• trust borrower structure
• LVR

Trust borrower plus rural residential security can require specialist lender selection.

Related research: Can You Get a Home Loan for a Hobby Farm or Rural Residential Property?

Can a trust buy a mixed-use property?

Possibly, but this is more complex.

A mixed-use property may involve:

• residential and commercial zoning
• shopfront plus dwelling
• office plus residence
• commercial lease
• related-party business use
• specialised valuation
• lower LVR

Some residential lenders may decline mixed-use properties, especially with trust borrowers.

Can a trust buy property with multiple dwellings?

Possibly.

The lender may assess:

• number of dwellings
• title structure
• council approval
• rental income
• zoning
• valuation
• marketability
• trust borrower policy

Multiple dwellings can already be niche. A trust structure adds complexity.

Can a trust buy company title property?

Possibly, but options may be very limited.

Company title is a property title issue, while trust lending is a borrower structure issue.

A lender must accept both:

• trust borrower
• company title security

Some lenders may accept one but not the other.

Can a trust buy leasehold property?

Possibly, but leasehold security is specialised.

The lender may need to assess:

• remaining lease term
• lease conditions
• valuation
• marketability
• transferability
• trust borrower policy
• loan term

Leasehold title plus a trust borrower can significantly narrow lender options.

Can a trust buy a serviced apartment?

This is difficult with many lenders.

Serviced apartments are often restricted security, and trust borrower lending is already specialised.

The lender may assess:

• serviced apartment management agreement
• zoning
• rental pool
• owner occupation restrictions
• valuation
• marketability
• LVR
• trust structure

Many lenders decline serviced apartments regardless of borrower type.

What documents are needed for a trust home loan?

Depending on the lender, you may need:

• trust deed
• all deed amendments
• trustee appointment documents
• corporate trustee ASIC extract
• company constitution
• director details
• shareholder details
• unit holder register
• beneficiary details
• appointor details
• trust tax returns
• trust financial statements
• personal tax returns
• notices of assessment
• rental appraisal or lease
• deposit evidence
• accountant letter
• trust resolution to borrow
• trustee resolution
• guarantor income documents
• identification for trustees and guarantors
• legal advice certificate, if required

The exact list depends on the structure.

What is a trust resolution to borrow?

A trust resolution to borrow is a formal decision by the trustee to enter into the loan.

The lender may require a resolution confirming that the trustee agrees to:

• borrow money
• purchase or refinance the property
• grant a mortgage
• provide security
• accept loan terms
• appoint authorised signatories
• execute loan documents

This is usually prepared using lender forms, trustee minutes or solicitor documents.

Why does the lender need legal review?

Trust loans often need legal review because the lender must confirm:

• trustee powers
• trust deed validity
• borrowing authority
• mortgage authority
• correct trustee
• correct trust name
• guarantee enforceability
• whether amendments are valid
• whether trust vesting date is acceptable

Trust deed defects can create settlement delays.

What is the vesting date?

The vesting date is the date the trust is scheduled to end or vest.

A lender may check the vesting date because the trust must remain valid for the loan term or acceptable period.

If the trust vests too soon, the lender may require legal advice or a deed amendment.

A trust with a short remaining term can create lending issues.

Can a trust loan term exceed the trust vesting date?

This may be a problem.

A lender may not want a 30-year loan if the trust vests in 10 years.

The lender may ask for:

• deed amendment
• legal opinion
• shorter loan term
• confirmation of trust powers
• solicitor involvement

Check the vesting date early.

What if the trust deed restricts borrowing?

The lender may not approve until the issue is fixed.

A trust deed may restrict:

• borrowing amount
• security powers
• property types
• trustee powers
• beneficiary dealings
• related-party transactions
• investment types

If the deed does not support the loan, legal advice is needed.

What if the trust is near its vesting date?

This can delay the loan.

Options may include:

• amending the trust deed, if legally possible
• shortening the loan term
• using a different ownership structure
• refinancing into personal names
• legal review
• lender-specific exception

Trust vesting should be checked before application.

What if the trust is an SMSF?

SMSF borrowing is a separate lending category.

An SMSF loan usually involves:

• SMSF trustee
• bare trustee or property trustee
• limited recourse borrowing arrangement
• SMSF trust deed
• bare trust deed
• SIS Act compliance
• member guarantees
• liquidity requirements
• audited SMSF financials or super statements
• investment strategy

Ordinary family trust or unit trust policy does not usually apply to SMSF loans.

Can a family trust borrow under SMSF policy?

No.

A family trust and SMSF are different legal structures.

An SMSF is a regulated superannuation fund.

A family trust is not a super fund.

If a lender excludes SMSF trusts under ordinary trust borrower policy, that does not mean family trusts are excluded. It means SMSF lending must use the lender’s SMSF product and legal structure.

Can a bare trust get a home loan?

A bare trust is usually used in SMSF lending or nominee-style structures.

Most ordinary residential lenders will want to understand why a bare trust is involved.

If the structure is for SMSF borrowing, it will usually be assessed under SMSF lending.

If not, legal review is likely required.

Can a hybrid trust get a home loan?

Possibly, but hybrid trusts can be more difficult.

Some lender policies may only refer to discretionary, family or unit trusts and may not clearly include hybrid trusts.

A lender may ask:

• what features make the trust hybrid?
• are there units and discretionary powers?
• who controls distributions?
• who must guarantee?
• does the deed allow borrowing?
• how is income assessed?

Hybrid trust structures should be checked with lender policy before applying.

Can a charitable trust get a home loan?

This is more specialised.

Most standard residential trust borrower policies are designed for family, discretionary or unit trusts.

A charitable trust may need:

• specialist lender review
• legal opinion
• trust deed assessment
• income verification
• governance documents
• purpose review
• guarantee review

This is unlikely to fit a standard home loan policy without specialist assessment.

Can a trust borrower use alt doc lending?

Sometimes, with specialist lenders.

A trust that operates a business may use alt doc evidence if the lender accepts both the borrower structure and income verification.

Alt doc evidence may include:

• BAS statements
• business bank statements
• accountant declaration
• ATO portal evidence
• income declaration
• trust financials
• rental statements
• guarantor income evidence

Trust alt doc lending is more specialised than individual alt doc lending.

Can a trust use full-doc self-employed income?

Yes.

A trust with business income may be assessed under self-employed income policy.

The lender may request:

• trust tax returns
• financial statements
• personal tax returns of beneficiaries
• notices of assessment
• distribution statements
• business liabilities
• BAS statements
• accountant commentary
• company trustee documents

Full-doc trust income can be strong if records are clean.

Can a trust use simple self-employed verification?

Sometimes, but not always.

Some simple self-employed policies include trust or company structures where the applicant pays themselves a salary from the company or trust and no additional business income is needed.

A lender may require:

• minimum ABN or ACN registration period
• LVR limit
• regular salary paid for a minimum period
• payslip or ATO lodged tax return
• accountant letter confirming the business is trading profitably
• no reliance on additional business profit

If business profit is needed, full verification may be required.

What if the trust runs a business and owns the property?

This can be more complex.

The lender may need to assess whether the property is:

• an investment asset
• business premises
• mixed-use property
• owner-occupied by related parties
• leased to a related business
• commercial security
• residential rental property

If the trust runs a business, lender assessment may shift toward business or commercial lending.

What if the trust has tax debt?

Tax debt can affect approval.

The lender may ask:

• how much is owed?
• is it GST, income tax, PAYG or other tax?
• is there a formal ATO payment plan?
• are repayments current?
• are lodgements up to date?
• does the debt affect cash flow?
• will the debt be paid at settlement?
• does the repayment need to be included?

A trust with uncontrolled tax debt may have fewer lender options.

What if the trust has an ATO payment plan?

An ATO payment plan may be acceptable with some lenders if it is formal and being met.

The lender may request:

• ATO payment arrangement
• current balance
• payment history
• accountant explanation
• evidence lodgements are up to date
• evidence payments are current
• servicing treatment

The repayment may need to be included in serviceability.

What if the trust has business debts?

Trust business debts need to be assessed.

These may include:

• overdrafts
• business loans
• equipment finance
• car loans
• credit cards
• leases
• hire purchase
• tax payment plans
• trade finance
• supplier debt
• director or beneficiary loans

The lender must understand whether the trust can service the new loan and existing debts.

What if the trust has an overdraft?

A trust overdraft may affect servicing.

The lender may ask:

• approved limit
• current balance
• purpose
• whether it is seasonal
• whether it is secured
• whether guarantors are liable
• whether the trust relies on it
• whether account conduct is clean

A constantly drawn overdraft may suggest cash-flow pressure.

What if the trust has a business credit card?

A trust or trustee credit card may be included if it is a continuing liability.

The lender may assess:

• card limit
• balance
• repayment history
• whether the card is in trustee name
• whether directors guarantee it
• whether repayments are shown in financials
• whether the card will be retained or closed

Business credit cards can reduce borrowing power.

What if the trust has related-party loans?

Related-party loans need explanation.

A lender may ask:

• who lent the funds?
• who owes the funds?
• are repayments required?
• is interest charged?
• is the loan genuine?
• is it subordinated?
• will it be repaid at settlement?
• does it affect trust income?

Related-party loans can affect both deposit source and serviceability.

What if beneficiaries lend money to the trust?

This may be used as a deposit or capital contribution, but it must be documented.

The lender may ask:

• is the money a loan or gift?
• are repayments required?
• is interest payable?
• who provided the funds?
• are funds borrowed from elsewhere?
• how is the contribution recorded?
• will the trust owe money back to the beneficiary?

If a beneficiary loan must be repaid, it may affect borrowing power.

What if the trust distributes income but retains cash?

This is common.

Trust accounting can show income distributed to beneficiaries even if cash remains within the trust or is dealt with through beneficiary loan accounts.

The lender may ask:

• was cash actually paid?
• is there an unpaid present entitlement?
• are beneficiary loan accounts involved?
• is the income available for serviceability?
• are there repayment obligations?
• does the accountant support the treatment?

Trust income and trust cash are not always the same thing.

What if the trust has unpaid present entitlements?

Unpaid present entitlements can complicate assessment.

A lender may ask:

• who is entitled to the money?
• is it owed to beneficiaries?
• is interest payable?
• will it be repaid?
• is it treated as a loan?
• does it affect trust cash flow?
• are there tax implications?

Accountant explanation may be needed.

What if the trust has multiple beneficiaries?

Multiple beneficiaries can complicate income use and guarantees.

The lender may ask:

• who receives distributions?
• who controls the trust?
• who is applying?
• who guarantees?
• are non-borrowing beneficiaries receiving income?
• are minor beneficiaries involved?
• are distributions discretionary?

A lender will generally use income available to the borrowers or guarantors, not every possible beneficiary.

What if one beneficiary has bad credit?

This may matter if the beneficiary is required to guarantee or provide income support.

If the beneficiary is passive and not a guarantor, it may matter less.

The lender may ask:

• does the beneficiary control the trust?
• does the beneficiary receive income?
• is the beneficiary a trustee or director?
• is the beneficiary required to guarantee?
• does the beneficiary have ownership rights?

Credit issues are most relevant where the person is a borrower or guarantor.

What if one unit holder has bad credit?

This can be a bigger issue because unit holders may be required to guarantee.

If a lender requires all unit holders to guarantee, one unit holder with adverse credit can affect the whole application.

Options may include:

• using a lender with different guarantee requirements
• restructuring unit holdings before applying, with legal and tax advice
• borrowing personally instead
• using a different entity
• lowering LVR
• using specialist lending

Do not restructure solely for lending without advice.

What if one trustee lives overseas?

Overseas trustees or directors can complicate the application.

The lender may consider:

• residency status
• visa status
• foreign tax residency
• signing documents overseas
• guarantee enforceability
• identification requirements
• foreign ownership rules
• FIRB requirements
• income verification

Some lenders may decline or require extra steps.

What if a beneficiary or unit holder is overseas?

This may also matter.

A lender may ask:

• are they required to guarantee?
• do they control the trust?
• are they a foreign person for tax or duty purposes?
• does FIRB apply?
• are foreign surcharges relevant?
• is income from overseas being used?

Trusts with foreign beneficiaries or unit holders can create legal and tax complexity.

Can foreign ownership affect trust lending?

Yes.

Foreign persons connected to a trust may trigger:

• foreign purchaser surcharge
• land tax surcharge
• FIRB requirements
• lender restrictions
• additional identity checks
• legal advice requirements

The rules are complex and vary by state and structure.

Get legal advice before buying property through a trust with foreign connections.

Can a trust get a guarantor loan?

Possibly, but this is more complex than a normal family guarantor loan.

Some guarantor loan products may exclude trust borrowers.

Others may require guarantors to be connected to the trust structure.

The lender may ask:

• who is the borrower?
• who owns or controls the trust?
• who is providing security?
• is the guarantor a beneficiary, trustee or related party?
• does the product allow trusts?
• is the guarantee limited or unlimited?

Family guarantee policy may not apply to trust borrowers in the same way as individuals.

Can a trust use family security guarantee?

Often, this is restricted.

Some lender policy excludes trusts or unit trusts from certain bridging or family guarantee structures.

If you are relying on a family guarantee, check whether the borrower must be an individual.

A trust borrower may need a larger cash deposit instead.

Can a trust get bridging finance?

Sometimes, but options may be restricted.

Some lender policies exclude unit trusts, companies or non-individual trust structures from certain bridging loan products.

A trust borrower seeking bridging finance may face limits on:

• borrower type
• property purpose
• existing security
• new security
• repayment source
• LVR
• cross-collateralisation

Trust bridging should be checked before committing to a buy-before-sell strategy.

Can a trust use equity release?

Possibly.

A lender may consider equity release if:

• the trust owns the property
• the purpose is acceptable
• LVR fits policy
• trust deed allows borrowing
• guarantors support the loan
• serviceability works
• cash-out evidence is provided
• tax and legal advice is considered

Trust cash-out can be more sensitive than individual cash-out.

Can a trust buy property with another borrower?

Some lenders do not allow mixed borrower types.

For example, they may not accept an application where individuals and trusts borrow together.

Other lenders may allow related parties or guarantors but not co-borrowers.

If you want to buy with a trust and individuals, lender policy must be checked early.

Can a trust borrow with a company?

This can be complex.

The lender may need to understand:

• which entity is borrower
• which entity is trustee
• whether the company is borrowing in its own capacity or as trustee
• who owns the company
• who guarantees
• whose income is used
• how the property will be held

A company and trust combination should be structured with legal and tax advice before applying.

What if the contract is signed in the wrong name?

This can cause serious problems.

The contract of sale should match the intended legal purchaser and lending structure.

A mismatch may create:

• lender delays
• nomination issues
• stamp duty consequences
• trust deed issues
• settlement delays
• legal costs
• first-home buyer concession problems
• refinance complications

If a trust is buying, confirm the correct purchaser name before signing.

What should the purchaser name look like?

The correct name depends on the structure.

Examples may include:

• ABC Pty Ltd as trustee for the ABC Family Trust
• John Smith and Jane Smith as trustees for the Smith Family Trust
• ABC Pty Ltd as trustee for the ABC Unit Trust

Your solicitor should confirm the exact wording before the contract is signed.

Do not rely on informal trust names or business names.

Can a trust borrow if the property is already owned personally?

A refinance into a trust name may involve a transfer of ownership, not just a refinance.

This can trigger:

• stamp duty
• capital gains tax
• loan discharge
• new loan application
• title transfer
• legal documents
• settlement complexity
• lender approval

Moving property into a trust should be reviewed with legal and tax advice.

Can a trust refinance property out of the trust?

Yes, but this may also involve a property transfer if ownership changes.

A lender may need to distinguish between:

• refinancing the existing trust borrower
• changing trustee
• transferring property to individuals
• selling from trust to beneficiary
• changing beneficial ownership

Each scenario has different legal and tax implications.

Does a trust need a bank account?

Usually, yes.

The lender may ask for a trust bank account or trustee account for:

• loan repayments
• rental income
• deposit funds
• settlement funds
• ongoing property expenses
• business or investment records

If the trust does not have a bank account, the lender may ask how funds are managed.

Can personal savings be used as deposit for a trust purchase?

Possibly.

If personal funds are contributed to the trust, the lender may ask whether they are:

• a gift
• beneficiary contribution
• unit subscription
• capital contribution
• loan to the trust
• distribution reinvestment
• director loan, if corporate trustee

The legal and accounting treatment matters.

Can business funds be used as deposit for a trust purchase?

Possibly, but it needs careful explanation.

The lender may ask:

• which entity owns the funds?
• are funds being lent to the trust?
• are funds being distributed?
• is there tax payable?
• is the business left with enough working capital?
• are ATO debts current?
• does the trust deed allow the contribution?

Business funds crossing into a trust should be documented by an accountant.

Can gift funds be used for a trust purchase?

Possibly, depending on lender policy.

The lender may ask:

• who is gifting the funds?
• who receives the gift?
• is it to the trust or the beneficiaries?
• is it repayable?
• is the donor related?
• is a gift letter required?
• does the trust deed allow the contribution?

Gift treatment is more complex when the borrower is a trust rather than an individual.

Can a trust receive borrowed deposit funds?

This can be difficult.

If the deposit is borrowed, the lender may include the new repayment and may question the source of funds.

They may ask:

• who borrowed the funds?
• is the trust liable?
• is a beneficiary liable?
• is the money repayable?
• are there loan documents?
• does the trust deed allow the borrowing?
• is the debt included in servicing?

Borrowed deposits can make trust lending harder.

Can a trust use sale proceeds as deposit?

Yes, if documented.

A lender may ask for:

• sale contract
• settlement statement
• bank statement showing proceeds
• trust ownership evidence
• confirmation of net proceeds
• payout figures for existing loans
• accountant explanation, if proceeds pass through related entities

Sale proceeds should be traceable.

Can a trust use shares or managed funds as deposit?

Possibly.

If investments are held by the trust, the lender may ask for:

• investment statements
• sale evidence
• bank credits
• trust ownership evidence
• margin loan details, if any
• accountant confirmation

If the investments are personally owned but contributed to the trust, the legal and tax treatment must be clear.

Can a trust use inheritance as deposit?

Possibly, but the lender needs the funds to be traceable and legally available.

The trust may need evidence such as:

• estate documents
• solicitor letter
• distribution statement
• bank credits
• gift or contribution explanation
• trustee resolution, if relevant

If inheritance is paid to an individual and then contributed to a trust, the contribution should be documented.

What if the trust has no prior tax returns?

A newly established property trust may not have prior tax returns.

Some lenders may still consider the application if:

• the trust is new and passive
• individual guarantor income supports the loan
• rental income is available
• the trust deed is acceptable
• the trustee is acceptable
• deposit source is clear
• LVR fits policy

A trading trust with no tax returns is usually harder.

What if the trust has old tax returns?

Older tax returns may not reflect current income.

The lender may ask for:

• updated financial statements
• BAS statements
• business bank statements
• rental statements
• accountant commentary
• current liabilities
• ATO account evidence

Current income evidence matters, especially for trading trusts.

What if the trust has losses?

Trust losses can reduce borrowing power.

The lender may ask:

• are losses from property, business or investments?
• are losses ongoing?
• were they one-off?
• has income recovered?
• are distributions still being made?
• are debts increasing?
• is the trust solvent?

A loss-making trust may still borrow if guarantor income supports the loan, but lender options may be narrower.

What if the trust distributes losses?

Trust tax treatment is complex.

For lending, the lender will focus on whether the trust income and guarantor income can support the loan.

If losses reduce personal taxable income, the lender may ask:

• what caused the loss?
• is the loss ongoing?
• does the trust still have debts?
• are there property expenses?
• are losses from a business?
• will losses continue after settlement?

Negative trust income can affect borrowing power.

Can negative gearing apply in a trust?

Trust negative gearing treatment differs from individual ownership.

Tax losses in a trust may not benefit beneficiaries in the same way as personal property losses.

The lender’s servicing calculator may not treat trust losses the same as personal negative gearing.

Tax advice is essential before using a trust to hold negatively geared property.

Can a trust access main residence exemption?

Usually, trusts do not receive the main residence exemption in the same way as individuals.

This is a major issue if a trust is buying a property that someone intends to live in.

Trust ownership may affect:

• capital gains tax
• land tax
• stamp duty
• first-home concessions
• owner-occupier benefits
• asset protection outcomes

Always get legal and tax advice before buying a home through a trust.

Can a trust access first-home buyer stamp duty concessions?

Usually, first-home buyer concessions are designed for individuals, not trusts.

Rules vary by state, but buying through a trust can affect eligibility.

If you are a first-home buyer, check this before signing a contract in a trust name.

The lending approval may be possible, but the tax and duty outcome may be unfavourable.

Can land tax be higher in a trust?

Yes, trust ownership can affect land tax.

Depending on the state, trusts may have:

• different thresholds
• surcharge rates
• foreign trust rules
• nomination requirements
• aggregation rules
• absentee or foreign beneficiary issues

Land tax is a key reason to obtain advice before using a trust.

Can a trust be treated as foreign?

Possibly.

Trusts can be treated as foreign for duty or land tax purposes if certain foreign persons are beneficiaries, unit holders, trustees or controlling parties.

This can be complex.

A trust with broad beneficiary classes may create unexpected foreign surcharge issues.

Legal advice is essential before purchasing property through a trust.

What if a trust has foreign beneficiaries?

Foreign beneficiaries may affect:

• stamp duty surcharge
• land tax surcharge
• FIRB requirements
• lender policy
• guarantor requirements
• tax advice

Some trust deeds include broad beneficiary classes that may unintentionally capture foreign persons.

This should be reviewed before purchase.

Can a trust get normal residential rates?

Sometimes, but pricing may differ.

Trust borrower loans may have:

• fewer lender options
• different product availability
• investment classification
• manual assessment
• legal review
• guarantee requirements
• lower LVR limits

Pricing can be similar to standard investment lending with some lenders, but higher or more restricted with others.

Are trust loans more expensive?

They can be.

Trust loans may cost more due to:

• legal review fees
• solicitor advice
• accountant advice
• trust deed review
• company trustee documentation
• limited lender choice
• lower LVR
• different pricing
• annual company trustee costs
• ongoing accounting costs

The loan rate is only one part of the total cost.

Can one lender decline and another approve?

Yes.

Trust lending is highly policy-dependent.

One lender may decline because:

• trust borrowers are not accepted
• unit trusts are not accepted
• hybrid trusts are not accepted
• all unit holders will not guarantee
• LVR is too high
• owner-occupied purpose is unacceptable
• trust deed is defective
• trustee is not acceptable
• property type is restricted
• income is not usable

Another lender may consider the same file with the right structure and documents.

Should you set up a trust before applying?

Only after getting advice.

A trust should not be created purely because it sounds useful for lending.

Before setting up a trust, consider:

• legal purpose
• tax consequences
• land tax
• stamp duty
• asset protection
• estate planning
• lending options
• first-home buyer concessions
• ongoing accounting costs
• trustee structure

A broker can check lending options, but your accountant and solicitor should advise on structure.

Should you use a trust or buy personally?

The right answer depends on your goals.

Buying personally may offer:

• more lender options
• simpler approval
• potentially higher LVR
• owner-occupier product access
• first-home buyer scheme eligibility
• simpler refinance
• simpler tax treatment for a home

Buying through a trust may offer:

• asset protection planning
• estate planning flexibility
• family wealth structuring
• fixed unit ownership
• investment structure benefits
• separation of assets

However, a trust can add cost and complexity.

Common mistakes with trust home loans

Do not assume all lenders accept trusts.

Do not sign the contract before confirming the correct trust purchaser name.

Do not confuse the trustee with the trust.

Do not assume unit trusts and discretionary trusts are treated the same.

Do not ignore the trust deed.

Do not forget deed amendments.

Do not assume all beneficiaries can provide income support.

Do not assume first-home buyer benefits apply.

Do not assume LMI or professional waivers apply to trusts.

Do not assume personal funds can be moved into a trust without explanation.

Do not let unit holders avoid guarantees if lender policy requires them.

How to improve your chances of approval

You can improve your chances by preparing the trust structure before applying.

Helpful steps include:

• confirm the exact trust type
• confirm the current trustee
• gather the trust deed and all amendments
• check the vesting date
• confirm unit holders or beneficiaries
• confirm directors and shareholders of any corporate trustee
• confirm who will provide guarantees
• obtain legal and tax advice
• check lender trust policy early
• document the deposit source
• prepare income evidence
• prepare rental evidence, if investment
• disclose business and trust debts
• keep ATO accounts current
• ensure the contract uses the correct purchaser name

Trust applications run more smoothly when the structure is clean and documented.

What documents should you prepare?

Before applying, prepare:

• trust deed
• all deed variations
• current trustee appointment documents
• corporate trustee ASIC extract
• company constitution, if corporate trustee
• director and shareholder details
• unit holder register, if unit trust
• beneficiary details, if requested
• appointor details
• trust tax returns
• trust financial statements
• BAS statements, if trading
• business bank statements, if trading
• personal tax returns for income-supporting parties
• notices of assessment
• rental appraisal or lease
• deposit evidence
• accountant letter
• solicitor details
• trust or trustee resolution to borrow

The lender may ask for more depending on the structure.

Should you wait before applying?

Sometimes waiting can help.

Waiting may improve your options if:

• the trust deed is missing
• trustee changes are incomplete
• deed amendments are not available
• tax advice is pending
• the trust is newly established
• income evidence is not ready
• unit holders have not agreed to guarantees
• deposit source is unclear
• LVR is too high
• the contract has not yet been signed

You may not need to wait if:

• trust documents are complete
• lender policy accepts the structure
• guarantees are available
• income evidence is clear
• LVR is acceptable
• property security is standard
• legal and tax advice has been obtained

A broker can compare trust borrowing against personal borrowing before you commit.

Example scenarios

Scenario 1: Discretionary family trust buying an investment property

A family trust with a corporate trustee wants to buy a rental property.

The lender reviews the trust deed, corporate trustee, directors, beneficiaries, guarantees, rental income and director income support.

Scenario 2: Unit trust with multiple unit holders

A unit trust wants to buy a residential investment property.

The lender asks for the unit holder register and requires personal guarantees from unit holders.

One unit holder has credit issues, so lender selection becomes important.

Scenario 3: Trust buying a home for a beneficiary to occupy

A trust wants to buy a property for a beneficiary to live in.

The lender checks whether owner-occupied trust lending is acceptable and whether the beneficiary, trustee or guarantors need to support the application.

Scenario 4: Corporate trustee with missing deed variation

The trust deed shows an old trustee, but a deed variation appointed a new corporate trustee.

The lender requests the variation before approving the loan.

Scenario 5: Trust income used for servicing

A borrower receives distributions from a family trust.

The lender asks whether the borrower is only a beneficiary or controls the trust, because this changes the income verification pathway.

Scenario 6: First-home buyer wants to use a trust

A first-home buyer wants to buy through a family trust.

The lender and solicitor warn that first-home buyer schemes and concessions may not apply to trust borrowers.

So, can a unit trust or discretionary trust get a home loan?

Yes, a unit trust or discretionary trust may be able to get a home loan, but approval depends on the lender and the structure.

The strongest trust borrower applications usually have:

• clear trust type
• complete trust deed and amendments
• acceptable trustee
• clear unit holders or beneficiaries
• available personal guarantees
• acceptable loan purpose
• standard residential security
• documented deposit source
• clear income evidence
• controlled tax and business debts
• acceptable LVR
• legal and tax advice completed
• lender policy that accepts the trust

A trust can be a useful property ownership structure, but it should be chosen for the right legal, tax and planning reasons, not just because it sounds sophisticated.

Need help getting a home loan in a trust?

A mortgage broker can help compare lenders that may consider discretionary trusts, family trusts, unit trusts, corporate trustees, individual trustees, trust distributions, unit holder guarantees and trust-held residential property.

We can review your trust structure, trustee, beneficiaries, unit holders, trust deed, income evidence, deposit source, LVR and borrowing options before you apply.

If you are thinking about buying or refinancing residential property in a trust, speak with a mortgage broker who understands how different lenders assess trust borrower structures.