Who this is for
- Landowners considering three or four townhouses on a larger Sydney lot
- Investors and small developers weighing up a terrace or multi-dwelling project
- Owners in areas affected by the NSW low and mid-rise reforms who want to understand finance early
- Family groups and partners planning a shared project (see family joint venture finance)
What the NSW low and mid-rise reforms changed
NSW Planning says the Low and Mid-Rise Housing Policy is being delivered in two stages. Stage 1, from 1 July 2024, permitted dual occupancies and semi-detached homes in R2 zones across NSW. Stage 2, from 28 February 2025, permits dual occupancies, multi-dwelling housing and residential flat buildings, and introduced new development standards, within low and mid-rise housing areas in Sydney, the Central Coast, Illawarra and Hunter regions.
Those areas are residential zones within 800 metres walking distance of nominated town centres and stations. Sites affected by certain hazards or constraints, including bushfire prone land, some flood-prone land and heritage items, are excluded, and some council areas are excluded entirely. See the NSW Planning frequently asked questions and our summary of how the reforms interact with finance.
Planning permissibility does not mean a project will be financed. Whether your site qualifies is a matter for your council, town planner and solicitor.
The real challenge: three to four dwellings is assessed like a project
With one or two dwellings, a lender may treat the loan much like a construction loan. With three or four, the request is more likely to be assessed as a development, looking at the end values, total cost, your equity and how the loan will be repaid. Many of these facilities are business- or investment-purpose loans and may be assessed and regulated differently from consumer home loans.
Presale expectations, equity requirements, LVR or LTC settings and fees vary by lender and by project. We do not quote figures, because they should come from a lender's assessment of your project.
Conditions apply. Lending criteria, fees, charges and eligibility apply and vary by lender and project. Not all applicants or projects will qualify. This is general information only and not credit or financial advice.
Questions to settle before you approach a lender
- Is the site within a low and mid-rise housing area, and is any exclusion likely to apply?
- Will you hold the townhouses, sell them or a mix of both?
- How will the site be divided or titled? Your solicitor should advise
- Do you have a fixed-price contract and an experienced builder? See fixed price vs cost plus
- Have you tested a lower-than-expected valuation? See construction valuation lower than contract
- What is your buffer if sales are slower or costs rise? See residual stock loans for one way unsold stock is discussed
Use our Sydney home loan calculators to test holding-cost scenarios and read the small development feasibility guide.
How townhouse projects compare with duplex and subdivision plans
A duplex involves two dwellings and often a simpler exit. A subdivision divides land, sometimes without building. Townhouse projects sit in between and commonly involve more dwellings, more approvals and a larger budget. If you are new to this, read first-time developer finance too.
How Mortgagefy helps
Mortgagefy is a broker, not a lender, and we do not fund projects ourselves. We help you prepare and, where a lender on our panel or our aggregator's panel assesses the project as suitable, arrange the application. Not every project will qualify.
Return to the development finance hub, the construction home loans page or our property investors section for related options.
Conditions apply. Lending criteria, fees, charges and eligibility apply and vary by lender and project. Not all applicants or projects will qualify. This is general information only and not credit or financial advice.
How it works: 4 simple steps
Confirm the site
Ask your council and town planner whether the lot suits three or four dwellings before finance is discussed.
Test the feasibility
Land, build, holding costs and end values are tested against your exit.
Discuss how it may be assessed
We explain how similar projects are commonly structured and what panel lenders may ask for.
Build and draw down
If a lender assesses the project, funds are typically released in stages. Terms vary by lender.
Tell us about your project in 2 minutes
Free, no obligation. Suitability is assessed case by case.
Frequently asked questions
What is townhouse development finance?
What is a terrace development loan?
What counts as multi dwelling housing under NSW planning?
Do the NSW low and mid-rise reforms apply to my block?
Do I need presales for townhouse development finance?
How much equity will I need?
Information checked on 1 October 2026. Policies, government schemes and lender participation may change.
Confirm current requirements and lender participation directly with your chosen provider before applying. Many development and construction scenarios are business- or investment-purpose lending, which may be assessed and regulated differently from consumer home loans. Some scenarios are arranged through Mortgagefy's lender panel and aggregator; Mortgagefy does not fund projects itself.
Development lending is higher-risk. Costs can rise, sales can take longer than planned and values can move, so get independent legal and accounting advice before you commit. We do not give tax, legal or planning advice; speak to your solicitor, accountant and council.
This information is general in nature. Policies vary by lender and change frequently. Confirm current requirements with your chosen provider and seek professional advice.
Conditions apply. Lending criteria, fees, charges and eligibility apply and vary by lender and project. Not all applicants or projects will qualify. This is general information only and not credit or financial advice.
Ask us how your townhouse project would be treated
Share the site, the number of dwellings and your exit plan. We will explain how similar projects are commonly assessed and which questions to settle first.
Conditions apply. Lending criteria, fees, charges and eligibility apply and vary by lender and project. Not all applicants or projects will qualify. This is general information only and not credit or financial advice.