What Interest Rate Margin is fair for my property project?

A Property Finance Lender will typically offer a variable interest rate based on the BBSY30 day rate. This rate is currently around 3.15%pa.

On top of this bank bill swap rate (BBSY30), they then add a lender margin for risks associated with the property development.

Factors that determine the margin include:
*LVR
* Pre-sales of dwellings before construction finance
* Location of development
* Profitability of the deal
* Strength of borrower's net asset position
* Is there a Plan B?
* Borrower experience
* Other income sources
* How easy it is to sell the completed property
* Market factors such as demand/supply

Weighing up all these factors, the lender decides on a lender margin of between 1.5% to 5%pa

Example:
Experienced borrower, $1m net asset position, has other business with good income, can hold the property if he wants, has 4 pre-sales. Development in a metro area in Victoria.

$2m construction loan to build 8 townhouses, LVR on "end value" is 60% LVR.
Lender Margin quoted at 3.5%pa above Bill Swap Rate = All up Interest Rate of 6.65%pa

Which lender is this? You will have to email me at loans@planassist.com.au