Refinancing An Investment Property When Your Strata Has A Loan

Refinancing an investment property in a building with a strata loan is possible, but only if you explain the owners corporation borrowing and levies clearly to the bank. The lender wants to see (1) why the loan was taken, (2) how it affects your cashflow, and (3) whether the building is now lower or higher risk.

Quick answer: what your bank actually wants to know

In practice, most lenders focus on three things:

1. Are levies (including the loan component) affordable after a 3% rate buffer?
2. Has the strata loan fixed a problem or created a new one? (e.g. major defects now resolved vs. still emerging.)
3. Is the scheme run well? (no big arrears, legal disputes or governance red flags.)

If you front‑foot these points with documents and a short written explanation, you dramatically cut the risk of a decline or last‑minute conditions.

Step 1: Build a simple “strata story” for your application

Prepare a 5–8 line summary you (or your broker) can paste into the refinance notes.

Your strata note should cover:

• Purpose of the strata loan – defects, fire upgrades, lifts, energy upgrades etc.
• Loan size and term – e.g. “$2.5m over 10 years, fixed for 5 years.”
• Works status – planned, in progress, or completed.
• Impact on levies – how much of your quarterly levy is the loan component.
• Scheme health – arrears under control, no major litigation, valuations improved.

Example wording:

In 2024 the owners corporation took a $1.8m, 10‑year strata loan to fund concrete spalling and fire compliance upgrades. Works are now complete and the building has passed final certification. My quarterly levies are $4,200, of which ~$1,300 relates to the loan. Arrears are below 5% of unit entitlements and there is no current litigation.

If the loan is being refinanced or restructured, flag that too and align your note with any plan your committee is discussing. For more context on that process, see /insights/when-to-refinance-or-restructure-a-strata-building-loan.

Step 2: Put the right documents in front of the credit assessor

Don’t wait for the bank to ask. Attach a clean pack with your application.

Core documents to provide (where available):

• Most recent AGM/EGM minutes approving the strata loan and major works.
• Strata levy notice or statement showing your quarterly amount and due dates.
• Latest strata loan statement or schedule (balance, term, repayments).
• Recent strata report or building condition report if you have one.
• Budget showing sinking/admin funds and projected levies over the next year.

This lets the assessor quickly see the big picture instead of guessing from a levy figure on your bank statement.

If your scheme is under pressure, or considering changes to the loan because levies are hurting owners, it’s worth understanding the building’s options first via /insights/refinancing-or-extending-strata-loan-under-stress-whats-realistic.