Home Loan Mortgage Brokers Kenilworth QLD

Brokering a Home Loan in Kenilworth

Case Study: Loanright Financial Services Secures Hobby Farm Purchase Using Equity for Kenilworth Couple

The Loanright Financial Services mortgage broker team recently helped a couple in their 50s successfully secure finance to purchase a small hobby farm on five acres in the picturesque hinterland town of Kenilworth, Queensland. The property was valued at $1,250,000 and represented a lifestyle-driven purchase as the couple transitioned into the next stage of life, seeking space, privacy, and a rural setting while maintaining financial flexibility.

The clients already owned a principal place of residence and had built up significant equity over time. Their goal was to leverage this equity, combined with a substantial cash contribution, to fund the purchase of the hobby farm without unnecessary complexity or financial stress. With a $750,000 deposit available, they wanted to borrow the remaining amount, including stamp duty and associated purchasing costs.

Understanding the Client’s Goals

From the outset, Loanright Financial Services took the time to understand the couple’s broader objectives. While affordability was not a concern, the clients were focused on structuring the loan in a way that preserved cash flow, minimised risk, and aligned with their long-term plans. They were not full-time farmers and did not intend to generate commercial income from the property, which meant the loan needed to be assessed as a lifestyle rural purchase rather than a commercial or agribusiness facility.

Additionally, the couple wanted clarity around how their existing home could be used as equity, what loan-to-value ratios would apply, and which lenders would be comfortable with a small acreage property without imposing restrictive conditions.

Key Home Loan Challenges

While the clients were in a strong financial position, purchasing a hobby farm introduced unique lending challenges. Not all lenders treat rural or semi-rural properties the same way, even when the acreage is relatively modest. Some lenders reduce maximum loan-to-value ratios for properties over a certain land size, while others require additional valuations or apply stricter servicing assessments.

Another consideration was stamp duty, which needed to be included in the total funds required. The clients wanted a clear picture of how much they would need to borrow and how best to structure the loan to avoid overextending against either property.

Loanright’s Mortgage Strategy and Solution

The Loanright Financial Services team conducted a detailed equity analysis on the clients’ existing home to determine how much usable equity was available while maintaining a conservative buffer. Based on this assessment, Loanright structured a lending solution that combined the clients’ $750,000 deposit with an equity release from their current property to cover the balance of the purchase price and stamp duty costs.

By carefully selecting lenders with favourable policies for lifestyle acreage properties, Loanright was able to avoid unnecessary restrictions and secure competitive loan terms. The team compared multiple lenders to identify one that:

• Accepted five-acre hobby farms under standard residential lending policies
• Offered competitive interest rates despite the rural aspect of the property
• Allowed equity to be accessed without excessive fees or complex loan splits
• Provided flexible repayment options suitable for clients in their 50s

The final loan structure ensured the overall loan-to-value ratio remained well within lender comfort levels, reducing risk and strengthening the approval outcome.

The Outcome

Loanright Financial Services successfully secured the required finance, enabling the couple to proceed confidently with their Kenilworth hobby farm purchase. The loan covered the remaining purchase price and stamp duty, while the clients retained a strong equity position in both properties.

The approval process was smooth, with Loanright managing communication between the lender, valuer, conveyancer, and the clients throughout each stage. This proactive approach ensured there were no delays and that the clients felt informed and supported from application through to settlement.

Why This Matters

This case study highlights the importance of working with an experienced mortgage broker when purchasing non-standard properties such as hobby farms. While the clients had a large deposit and significant equity, navigating lender policies without expert guidance could have resulted in unnecessary complications or less favourable terms.

Loanright Financial Services’ in-depth understanding of lender criteria, equity lending strategies, and lifestyle property purchases allowed the team to tailor a solution that met the clients’ financial and lifestyle goals.

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