A trust home loan depends on the lender accepting the trust type and the proposed trustee borrower. A company can also borrow for residential property under a lender’s company-borrower policy. Establish who owns the property, who borrows and whose income repays the loan before choosing a product.
A family trust with a corporate trustee can receive a different answer from the same trust with individual trustees. A director’s personal application also needs a different income assessment from an application by their company.
Map the Trust and Proposed Borrower
For a home loan in trust, identify the trustee who will enter the borrowing arrangement and the capacity in which they act. Business.gov.au explains trustee responsibilities: a trustee holds assets for beneficiaries and can be a person or company. The trust name alone does not identify a natural-person borrower.
Prepare a structure diagram and record each of these details separately:
- The trust name and type: family or discretionary, unit, hybrid or another structure.
- The trustee’s full legal name and whether the trustee is an individual or a company.
- The beneficiaries or beneficiary classes, and unit holders where relevant.
- The registered property owner and the capacity shown on the title or proposed purchase documents.
- Every proposed borrower and guarantor, with their role in the structure.
In a hypothetical family trust purchase, Harbour Trustee Pty Ltd acts as trustee for Harbour Family Trust. The company directors apply as guarantors. The family members receiving distributions are beneficiaries. Those roles remain separate even when the same people control the company and receive trust income.
Borrowing through a self-managed super fund has its own structure and requirements. Use the SMSF loan guide for that file.
Read the Deed and Authority Requirements
The trust deed and amendments establish the structure that the lender must assess. Gather the full executed deed, every variation and documents appointing or replacing trustees. Include the unit register for a unit trust and the corporate trustee’s registration documents.
Ask the selected lender which documents need certification and which authority evidence it requires. The evidence pack can include a trustee resolution approving the borrowing, the mortgage and any guarantees. A corporate trustee can also need its constitution and the relevant company resolution.
Flag clauses about borrowing powers, granting security and the trustee’s right to use trust assets to meet liabilities. Record any discrepancy between the deed, title and proposed application names. Send unclear wording, missing variations or a change of trustee to the lender’s legal team and the client’s solicitor.
The broker collects evidence and identifies questions. A solicitor confirms the deed’s legal effect and any amendment needed for the proposed transaction. An accountant addresses tax consequences. Do not rewrite the structure or promise asset protection as part of lender selection.
When a Company Borrows
A home loan in company name requires assessment of the company as borrower. For a director’s personal home loan, assess the individual and the company income available to them. A company acting as trustee has an additional capacity that must match the trust documents.
The Australian Securities and Investments Commission (ASIC) explains that a company is a separate legal entity. It can own property and enter contracts. A director’s control of the company does not make the company’s assets personal assets.
Record the residential purpose, proposed security and borrower structure before discussing product eligibility. A company buying a residential investment property is different from a person borrowing to buy shares in a company. Residential security alone does not establish that the loan funds a residential property purchase.
Ask credit to confirm the applicable product, documentation and regulatory treatment. ASIC’s National Credit Code guidance ties coverage to the debtor type and credit purpose, alongside other conditions. Natural persons and strata corporations are within its debtor test. A company borrower therefore needs its own assessment, especially where the transaction also involves individuals. Obtain legal confirmation of an uncertain classification before using it to describe the client’s protections.
Check Guarantees, Registration and Identity
Guarantees depend on the lender and structure. Under Firstmac’s residential policy, company borrowers need unlimited joint and several personal guarantees from all current directors. Firstmac accepts no guarantee from someone who is not a current director of that company borrower.
For a corporate trustee, Firstmac requires personal guarantees from all current directors. Unit trusts also need guarantees from all unit holders. Its trust rules restrict guarantors to those groups. Being a discretionary beneficiary alone does not establish a guarantee requirement under this policy.
Firstmac requires trust guarantors to obtain independent legal advice, with a possible waiver in specified circumstances. Collect the lender’s advice certificate or approved waiver evidence. A guarantee exposes the guarantor to repayment obligations. The solicitor must explain its scope and consequences.
Confirm the selected lender’s identity and authority checklist. Collect the company registration record, Australian Company Number and registered name. Check current directors against the application and obtain the ownership chain through to the beneficial owners. Provide identity documents for the people the lender requires, plus its signing authority evidence.
For Firstmac trust applications, the corporate trustee must be an Australian-domiciled proprietary limited company registered with ASIC. Check the actual company record, rather than relying on a trading name or accountant’s letter.
Trace Income and Commitments
Trace trust income to the person or entity entitled to use it for repayments. A distribution shown in an individual’s tax return differs from income retained in the trust. Match the trust accounts and distribution records to the recipient’s return and evidence of receipt where required.
For company income, separate salary paid to the director, dividends paid or declared and profits retained in the company. Show which entity earns the money and how it reaches the proposed borrower. A company bank balance alone does not establish personal income.
Firstmac’s policy illustrates why the borrower identity changes the result. It allows company income or profits for serviceability only where the company is the borrower. For an individual director, Firstmac assesses the business’s ability to keep paying income such as dividends or director fees. It excludes company profit from that individual’s serviceability calculation.
Use the self-employed home loan guide for the wider financial-document assessment. Keep the entity map beside those documents so the assessor can follow each payment.
For example, a hypothetical company earns $180,000 before paying a $90,000 director salary. Its accounts then show $90,000 profit. Adding the original $180,000 and salary would count the same payment twice. Whether remaining profit is usable depends on the borrower structure and lender policy.
Record debts in each related entity, director loans and existing guarantees. Include the borrower, limit, repayment and purpose for each commitment. Firstmac requires guaranteed loans for a person, company or trust to be disclosed and included in serviceability. Explain related-party transfers so the assessor can distinguish income from a loan repayment or movement of existing funds.
Confirm Acceptance by Structure Before Submission
Use structure-specific policy to decide whether to submit. This matrix describes Firstmac’s residential lending policy, particularly sections 7.7 and 7.8. Eligibility still depends on the complete credit assessment.
| Structure | Firstmac’s Published Position | Borrower or Guarantee Requirement |
|---|---|---|
| Family or discretionary trust | Considered with a corporate trustee | Trustee company borrows in its own capacity and as trustee; all current directors guarantee |
| Unit trust | Considered with a corporate trustee | Same trustee capacities; guarantees from all current directors and all unit holders |
| Hybrid trust | Not accepted | Select a lender whose policy addresses the actual hybrid structure |
| Corporate trustee | Must be an Australian-domiciled proprietary limited company registered with ASIC | Individual trustees are not accepted under this trust policy |
| Company borrowing in its own right | Company-borrower policy applies | Unlimited joint and several personal guarantees from all current directors |
Keep this matrix separate from another lender’s rules. The lender-policy guides help you assess the selected lender’s own requirements.
When a deed, income route or borrower capacity needs a credit decision, attach the structure diagram and relevant documents to a specific question. For example, ask whether the named corporate trustee can borrow in both required capacities under the supplied deed. Ask which distributions or director payments credit will use and how it will assess existing guarantees.
Before submission, confirm that the proposed application names match credit’s approved structure. Retain the response and any conditions with the deed and financial evidence. A general statement that the lender accepts trusts does not resolve an individual-trustee or hybrid-trust file.
Preserve Entity Links After Settlement
Keep the settled loan identifier beside the trustee, trust and company names used in the application and commission statement. Record the directors and guarantors separately. An entity loan and a director’s personal loan need separate records even when the same person is your contact.
Preserve previous names and the evidence for any company-name or trustee change. A statement can use a shortened company name while your client record uses the trust name. Without the settled identifier and name history, a future review or trail check can match the wrong loan.
Track My Trail’s client profiles collect loans and their trail, upfront and clawback totals with notes. Use the entity details in your records to reconcile the statement’s loan reference before treating a name change as a discharge or replacement loan. Keep the lender-approved borrower structure attached to that identifier for the next review.
