Simple hacks to buy a more accessible home

When you're separating and need to find a place that works for mobility requirements or accessibility needs, the property search becomes more specific.

Accessible homes cost more to buy or require upfront modifications, which changes how you approach the loan structure. Lenders assess borrowing capacity on the purchase price, but they can also factor in renovation costs if you're planning to make changes after settlement. The question is whether you finance those modifications through the initial loan, a construction component, or a separate refinance later.

Finding properties with existing accessibility features

Properties with wheelchair access, step-free entry, wider doorways, or modified bathrooms are less common in the resale market. Most were purpose-built or adapted by the previous owner. That means you might be looking at a smaller pool of properties, and in some suburbs, you'll pay a premium for those features already in place.

In our experience, buyers in this situation often choose between two paths: purchasing a home that already has most of what they need, or buying a property with good bones and a layout that can be modified without major structural work. The first option means a higher purchase price upfront. The second means a lower purchase price but immediate renovation costs.

Consider a buyer looking for a single-level home in a suburb close to medical facilities. They find a property with level access and a modified bathroom for around $50,000 more than comparable homes without those features. The higher purchase price increases the loan amount, but it also means they can move in without waiting for builders or dealing with council approvals. In that scenario, the home loan application is structured as a standard owner occupied variable rate or split rate loan, with no construction component.

Borrowing for a property that needs modifications

If you're buying a home that needs work to make it accessible, you can structure the loan to include those costs upfront rather than paying for them separately after settlement.

A construction loan or renovation loan lets you borrow the purchase price plus the cost of the modifications in one loan. The lender releases funds in stages as the work is completed, which means you're only paying interest on the amount drawn down at each stage. This approach works when you have quotes from builders and a clear scope of work before settlement.

Lenders will typically lend up to 80% of the combined value of the property and the completed renovations, sometimes higher with Lenders Mortgage Insurance. They'll want to see quotes, plans, and in some cases, council approval before they commit to the full loan amount. The challenge for someone separating is that borrowing capacity is often calculated on a single income, so the loan amount needs to fit within what you can service on your own.

Using equity from the previous property

If you're receiving equity from a property settlement, that amount can reduce the loan you need or cover the cost of modifications without borrowing extra.

Say you're walking away from the settlement with $120,000 in equity. You find a property for $480,000 that needs $40,000 in accessibility modifications. You could use $96,000 as a 20% deposit, avoid LMI, and keep the remaining $24,000 to cover part of the renovation costs. The shortfall of $16,000 could be financed through a construction component on the loan or paid from savings.

The decision depends on whether you want to keep cash in reserve for other costs or whether you'd rather borrow the full amount and preserve your liquidity. Lenders will assess your income and expenses either way, but having a larger deposit can sometimes improve the interest rate or open up lenders who offer better terms at lower loan to value ratios.

If you're not sure how much equity you'll receive or when the settlement will finalise, you can apply for home loan pre-approval based on an estimate and update the details once the amount is confirmed. That gives you a clear budget when you start looking at properties.

Offset accounts and loan features that support modifications over time

Not every modification needs to happen at settlement. Some buyers prefer to move in first, live in the space, and then make changes in stages as they understand what works and what doesn't.

If that's your approach, a variable rate loan with an offset account linked to it gives you flexibility. You can park the equity or savings in the offset, reduce the interest you're paying on the loan, and draw from that account when you're ready to pay for modifications. That way, you're not locked into a construction timeline before you've even moved in.

A split rate loan can also work if you want some certainty around repayments while keeping part of the loan variable for flexibility. You might fix 60% of the loan to lock in repayments and leave 40% variable with an offset account attached. The fixed portion gives you predictable costs, and the variable portion lets you make extra repayments or redraw if you need funds for modifications later.

How lenders assess borrowing capacity when accessibility is a factor

Lenders don't typically account for the fact that you're buying a more expensive property because of accessibility needs. They assess your income, expenses, and the loan amount the same way they would for any other purchase.

That said, if you're buying a property that's priced higher because of existing accessible features, the valuation should reflect that. The lender will order a valuation to confirm the property is worth what you're paying, and if the modifications are already in place, that value is built in.

If you're buying a property that needs work, the lender will order a valuation based on the property's current condition, then a second valuation or desktop review once the modifications are complete. The loan is approved on the 'as if complete' valuation, but the funds are released in stages.

Your borrowing capacity is based on your income after separation, so if you're moving from dual income to single income, the amount you can borrow will likely be lower than what you qualified for previously. That's where the deposit size becomes important. The more equity you can put toward the purchase, the smaller the loan you need and the easier it is to meet serviceability requirements.

What happens if the property needs urgent modifications

Some modifications can't wait. If you're buying a property and need changes made before you can move in, the timeline matters.

A construction loan can take longer to settle than a standard loan because the lender needs to review quotes, plans, and sometimes council approvals. If the property is vacant and the seller is flexible, that's manageable. If you're renting and need to move quickly, the delay can create problems.

In that case, some buyers choose to settle on a standard loan, move in, and then refinance to a construction loan or use a personal loan to cover urgent modifications in the short term. That approach is more expensive because you're paying interest on two facilities, but it solves the timing issue.

Another option is to negotiate a longer settlement period with the seller to give the construction loan time to be assessed and approved. If the seller is motivated and the property has been on the market for a while, they might agree to a 90-day settlement instead of the standard 60 days. That gives you time to get quotes, submit the loan application, and have everything in place before settlement.

Grants and schemes that reduce upfront costs

Depending on your situation, you might be eligible for state-based grants or support schemes that offset the cost of accessibility modifications.

Some states offer grants for home modifications if you or someone living with you has a disability. These grants don't form part of the loan, but they reduce the amount you need to borrow. If you're eligible, you apply separately through the relevant state government department, and the funds are paid either directly to the builder or reimbursed to you after the work is completed.

If you're buying your first home after separation, you might also be eligible for First Home Owner Grant or stamp duty concessions depending on your state and the purchase price. These don't specifically relate to accessibility, but they reduce the upfront costs and make it easier to afford a property that meets your needs.

Your broker can point you toward the relevant schemes, but the application process is separate from the loan itself. You'll need to provide evidence of eligibility and in some cases, quotes or invoices for the work being done.

If you're buying a property that needs modifications and you're not sure how to structure the loan or what you can afford, call one of our team or book an appointment at a time that works for you.

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