The FY27 Property Finance Stack and the Non-Bank Shift
FY27 Property Finance: Non-Bank Shift | Switchboard Finance
Property Finance
Property Stack · Non-Bank Shift · FY27
The FY27 Property Finance Stack and the Non-Bank Shift
Banks have tightened just as more self-employed property deals need to move quickly. In the new financial year the funding answer is increasingly a stack of non-bank and private facilities, matched to the deal rather than a payslip. Here is how that stack fits together, lane by lane, and the shift behind it.
Quick Answer
As the banks tighten, more self-employed property deals are funded by routing around the bank into a stack of non-bank facilities, matched to the deal rather than a payslip. The lanes run from a senior commercial property loan through to private lending.
The FY27 property finance stack, in one view
The property finance stack is the set of property-secured facilities a self-employed owner draws on together to fund a deal a single bank loan will not, and in FY27 more of those deals route around the bank, not through it. The reason is structural rather than fashionable: the major banks have tightened their servicing tests and timelines, while non-bank and private funders price on the deal in front of them. The simplest way to see the difference is to put the two routes side by side.
Read across the table, the point is not that one route is good and the other bad; it is that they read a deal differently. A bank reads your servicing template first, the non-bank stack reads the asset, the security and the exit. For a self-employed owner whose income does not fit a payslip-shaped box, that is why the funding gets matched to the deal, not the payslip.
What the non-bank shift actually looks like
The non-bank shift is real but measured, not a takeover. Banks have pulled back at the margin while non-bank and private lenders have taken on more property deals, and in practice the most movement has been on the developer side. The Reserve Bank's latest Financial Stability Review sets out both halves of that picture: non-bank lending standards have eased modestly for property developers, including less stringent presales and some reduced collateral requirements, while the sector overall stays small.
So the takeaway is not that the banks have left the field. Non-banks remain a small share of the system, illustrative market context rather than a structural change, and they are most useful where speed, flexibility or a deal-based read matters more than the last basis point on the rate.
The lanes in the stack, and stacking without overlap
The lanes in the stack run from the cheapest, most senior money down to the fastest, and the rule that holds them together is simple: stack the facilities, do not overlap them. Each layer sits at a clear priority and is repaid from a defined part of the plan, because the exit carries every facility, not just the senior one.
At the top sit the non-bank seniors and private funders that hold the main security. A commercial property loan or development finance is the senior layer for a hold or a build, read on the asset and the feasibility rather than a payslip, and the LVR the lender works to sets how much of the deal it will carry.
Behind the senior, a second mortgage can release equity without resetting the first loan, sitting at a lower priority with the first mortgagee's consent. Where the need is a short timing gap rather than a structural one, a caveat loan can move quickly, and what a funder prices first is the exit strategy, because a caveat is a noted interest that has to be cleared on a date. The way a junior facility sits behind the senior debt is a question of priority and consent, not just rate.
Furthest down for speed sits private lending, useful when a deal cannot wait for a bank's timeline, covered in private lending for property-secured deals. The broader read on using property as security for a business purpose is walked through in our property security business loan guide, and the way the lanes connect is mapped in the property lending hub. A private lender reads the deal and its exit, not your salary.
What moves a non-bank deal, and what slows it down
What moves a non-bank property deal is preparation, not pressure. The files that move fastest are the ones where the security is clean, the equity is evidenced and the exit is dated, because that is what a funder can underwrite without a long back and forth. What slows a deal down is the opposite, and it is almost always fixable before you go to a lender.
What Moves Faster
- A clean security position the funder can read at a glance
- Equity that is evidenced, not just assumed off the site value
- A credible dated exit, a sale or a refinance, that repays the stack
What Slows It Down
- Tangled or contested security that has to be untangled first
- No equity beyond the land, so there is nothing to read behind the deal
- No dated exit, which leaves every facility in the stack unanchored
None of this is about pushing a deal through; it is about presenting it so the right lane can carry it. Get the security, the equity and the exit clear, and the question stops being whether the deal can be funded and becomes which part of the stack should fund it, matched to the deal, not the payslip. That is what actually gets a deal funded.
The FY27 picture is not that property finance has dried up; it is that more of it now routes around the bank and into a stack of non-bank and private facilities. The lanes run from a senior commercial property loan or development line, through a second mortgage and a caveat, down to private lending, each one stacked at its own priority and repaid from a defined exit. Across the whole stack the read is the same: the deal, the security and the exit, matched to the deal, not the payslip. The full map sits in the property lending hub.
Key takeaway: Work out which lane carries your deal, then stack the rest behind it at clear priorities, because in FY27 the funding follows the deal and its exit, not your payslip.Frequently Asked Questions
A property finance stack is the set of property-secured facilities a self-employed borrower uses together to fund a deal a single bank loan will not cover, from a senior commercial or development loan through to a second mortgage, a caveat loan or private lending. The point is to stack the facilities, not overlap them, so each one sits at a clear priority and is repaid from a defined exit. You can see how the lanes fit together in the property lending hub, and the senior layer is explained in the senior debt glossary entry.
More property investors are using non-bank lenders because banks have tightened servicing tests and timelines while non-bank lending standards for property developers have eased a little, which suits deals read on the project rather than a payslip. The Reserve Bank notes that non-bank lenders still hold only a small share of system assets, so this is a shift in where certain deals are funded, not a wholesale change. The evidence is set out in the RBA Financial Stability Review, and the funder's own approach is covered on our private lending page.
Using more than one loan on the same property deal is common and workable, provided the facilities are stacked at clear priorities rather than overlapped, so a senior loan sits first and a second mortgage or a caveat sits behind it with consent. Each layer has to be priced and repaid from its own part of the plan, and the exit has to carry every facility, not just the senior one. What a funder reads first is the exit strategy, because that is what repays the whole stack.
Non-bank property finance is usually priced above a comparable bank loan, because it is bought for speed, flexibility and a read on the deal rather than the lowest possible rate, and the exact pricing varies by lender and by the risk of the file. For many time-sensitive or structured property deals the cost is the price of getting the deal done at all, where a bank could not move in time. The trade-offs for a property-secured facility are set out on our commercial property loan page and in the private lending overview.
Non-bank lenders assess a self-employed property borrower on the deal and its security rather than a payslip, reading the asset, the equity behind it, the trading cash flow and a credible dated exit. Alt-doc income and add-backs are read in context, so a strong file is one where the numbers stack at conservative assumptions and the exit is clear. The practical read for a property-secured business loan is walked through in our property security business loan guide.
FBAA Accredited
