How Do I Get a Loan to Flip a House in Australia?

In short: Most Australian house-flip loans are short-term (3-18 months), interest-only facilities secured by a first or second mortgage over the project property (and sometimes additional security). Major banks rarely fund flips on speculative timeframes, so most flippers use specialist private lenders. Expect to fund the deposit, stamp duty and renovation contingency yourself, and to borrow up to roughly 70-75% of the as-is value of the property (or the lower of as-is and on-completion, depending on the lender).

What is a 'house-flip loan' in Australia?

House flipping - buying a property, renovating it and reselling at a profit inside a short window - is a different financing problem from buying a long-term home or investment. The holding period is short, the income from the property is zero (you are not renting it during the flip), the works themselves change the security's value, and the exit is sale rather than refinance to a 25-year mortgage.

Australian banks build their residential mortgage products around long-hold borrowers earning rental or PAYG income, which is why most experienced flippers do not finance their projects through major banks at all. The right product is a short-term, interest-only bridging or private renovation loan with a clear sale exit.

Loan types used to finance an Australian house flip

1. Private first mortgage

The most common structure for a single-property flip. The lender takes a registered first mortgage over the project property and sets a 6 to 12 month interest-only term, with the principal repaid from sale proceeds. LVR is typically up to 70% of the as-is purchase price. Suits experienced flippers buying at or below market who can fund the renovation works from cash.

2. Private second mortgage

Where the borrower already owns a property with significant residual equity (often the family home or an investment property), a second mortgage over that existing property can fund the deposit, stamp duty and works for the new flip - sometimes alongside a separate first mortgage on the project property. This avoids disturbing a well-priced existing bank loan and can be very capital efficient.

3. Construction or renovation progress drawdown

Larger flips - particularly knock-down/rebuild projects or substantial structural renovations - may use a progress-drawdown facility, where the lender funds an initial advance for the purchase and additional advances against signed-off works progress. The lender's quantity surveyor inspects each milestone before releasing funds.

4. Caveat loan (short, sharp, interim only)

A caveat loan can be used as a short bridge - typically 1 to 6 months - to settle a purchase or fund initial works while a longer-term flip facility is put in place. Caveat loans are typically smaller and shorter than mortgage-backed facilities and price accordingly.

How much can I borrow to flip a house?

Most Australian private renovation lenders will fund up to 65-75% of the as-is value (or lower of as-is and on-completion value) on a single project. A simplified worked example:

Deal snapshot

Property purchase price	$700,000
Stamp duty and acquisition costs	$35,000
Renovation budget (cash funded)	$120,000
Lender LVR cap	70% of as-is value
Maximum borrowable (purchase)	$490,000
Borrower's required cash	$210,000 + $35,000 + $120,000 = $365,000
Targeted on-completion sale	$1,000,000
Indicative gross profit pre-costs	$180,000 (subject to selling costs, holding costs, GST)

These numbers are illustrative only. Actual leverage, pricing and feasibility depend on the borrower, the property, the works program and the local market.

What does a flip loan cost in Australia?

Private renovation loans price for the speed, flexibility and specialist underwriting they provide. Expect:

• Interest rates above bank prime - typically priced as a monthly rate, with competitive deals starting from around 0.85% per month and rising for higher LVR or more complex works

• Establishment fee, typically 1-2% of the loan amount

• Lender legal costs, valuation fees and (where required) quantity surveyor fees

• Discharge fee at payout, generally modest

When evaluating a flip facility, look at the all-in cost over the expected holding period - not the headline monthly rate. A faster, more reliable settlement frequently saves more in deferred holding costs and missed sale windows than the headline rate differential is worth.

Eligibility - what private renovation lenders look for

• Clear, defendable purchase price - ideally with comparable sales evidence

• Realistic on-completion value, supported by a current valuation or experienced agent appraisal

• Defined scope of works with a fixed-price builder contract or detailed quotes

• Genuine cash contribution from the borrower - typically the deposit, stamp duty and contingency

• Clean title and (for established borrowers) a track record of completed projects

• Documented exit strategy: marketing plan, agency engagement, expected sale window

Step-by-step: how to get a flip loan in Australia

1. Build the feasibility before you write the offer. Run the feasibility on conservative numbers - purchase, stamp duty, renovation, interest, holding costs, agent's commission, marketing, GST where applicable - and confirm the project still works at a 5-10% downside on the on-completion value. If it does not, walk away.

2. Engage a broker or speak directly to a private lender early. An experienced commercial broker who deals regularly with private lenders (or, in many cases, a direct conversation with the lender) will tell you in an initial 15-minute call whether the deal fits and what indicative terms look like.

3. Submit the deal. Most private lenders need: borrower ID, asset and liability statement, contract of sale, scope of works and builder quote, indicative on-completion valuation evidence, and a one-page exit summary.

4. Indicative terms and acceptance. Indicative terms are typically issued within 24-48 hours of a complete submission. Once accepted, the lender orders a formal valuation.

5. Valuation and credit decision. A residential valuation typically takes 5-7 business days. Credit decision follows immediately on receipt.

6. Loan documents and settlement. Loan documents are issued, the borrower's solicitor reviews and signs, and settlement is booked - typically inside 10-14 business days from initial enquiry on a clean residential security.

7. Renovation, sale, payout. The borrower undertakes the works, lists for sale, and the loan is paid out at the settlement of the on-sale.

Common pitfalls when financing a flip

• Optimistic on-completion value - lenders will not lend against your hope, only against defendable comparables

• Underestimating holding costs - every month past your planned exit is real interest, rates, insurance and utilities

• Underestimating GST - flipping new or substantially renovated residential property can attract GST; obtain advice before settlement

• Borrowing the renovation budget on a credit card or unsecured line at high effective rates

• Not budgeting a contingency - 10-15% of the renovation budget is sensible

Regulatory and tax notes

Loans for genuinely commercial or investment purposes - including house-flipping projects - are not regulated under the National Consumer Credit Protection Act. Tax and GST treatment of profits from flipping depends on your circumstances; the ATO publishes guidance on property development and flipping, and you should obtain advice from a registered tax agent before your first project. Always obtain independent legal and financial advice before entering a loan.

FAQs - house-flipping loans in Australia

Can a major bank fund a house flip in Australia?

Major banks are generally cautious about funding speculative short-hold renovations. They prefer to fund long-hold investment property loans supported by ongoing rental income. Most experienced Australian flippers use private or specialist lenders for the project loan, then (if they decide to keep the property) refinance to a bank facility post-completion.

Do I need to be a builder to get a flip loan?

No. Most flippers are not licensed builders - they engage a licensed builder to perform the works under a fixed-price contract. Lenders do look favourably on borrowers with a clear track record of completed projects, but a first-time flipper with a strong deal and a credible builder can typically obtain finance.

How fast can a flip loan settle?

Settlement inside 10-14 business days is normal on a clean residential security. Particularly clean files with current valuations on file can settle in under a week.

What if my renovation runs over time or budget?

Build a 10-15% contingency into the renovation budget at the outset. If the project still runs over, most private lenders will consider a term extension on commercial terms, provided the underlying exit remains intact.

Can I roll multiple flips into a revolving facility?

Experienced flippers undertaking multiple projects per year can sometimes structure a revolving facility - or at least a streamlined approval process - with a regular private lender. Pricing tends to improve with track record.

Talk to a private lending specialist

If you are planning a house flip in Australia and want to understand the financing options before you write your next offer, contact the Innovate Funding team for a confidential discussion. We assess deals on the merits of the security and the exit strategy, not just servicing calculators.

Learn more about our private lending solutions or browse other case studies on the Innovate Funding blog.

Disclaimer: This case study is published for general information only. Loan terms, interest rates and outcomes vary and depend on the specifics of each transaction. Innovate Funding (Australian Credit Licence applicable to consumer credit; commercial transactions are unregulated) lends to commercial and investment borrowers across Australia. Always obtain independent legal and financial advice before entering a loan.