May 28, 2026 Community & Social Infrastructure

A Commercial Mortgage Guide for Aged Care Facility Owners

Buying the freehold of the aged care facility or nursing home you operate is a defining step for any provider. At Ardent Capital Group we speak with operators about this kind of commercial property purchase regularly, so this guide sets out how a lender reads an aged care asset and what shapes the finance.

Ardent Capital Group is a specialist in commercial mortgages for aged care facility and nursing home operators across Australia. Our team can help you move from tenant to owner, and give you clear lending advice on structure and strategy.

Funding range: Access commercial property finance from $100,000 to $10,000,000+, tailored to aged care operators.
Proven track record: Over $500,000,000 in funding facilitated across the last decade for business owners.
National coverage: Sydney, Melbourne, Brisbane, Gold Coast, Perth, Adelaide, Canberra, Hobart and regional centres.
Sector fluency: Lending structures aligned to occupancy, AN-ACC revenue, care staffing and compliance timelines.

What ownership gives an aged care facility operator

Owning the freehold provides control over a complex, high-spec asset. An aged care facility build or fit-out often runs to seven figures once you include nurse call systems, fire detection and sprinklers, lifts, back-up generators, secure dementia modifications, medical storage, negative pressure or isolation rooms, commercial kitchens, laundry plant and compliant waste handling. Location anchors your resident base, your workforce and referrers. Sector income is resilient, supported by ageing demographics and government funding mechanisms. Mortgage repayments build equity in an asset that underpins the business.

Common drivers for aged care freehold ownership:

Control of clinical upgrades: Schedule refurbishments and compliance works without landlord negotiation, including dementia wing refurbishments and fire safety upgrades.
Continuation of care: Reduce relocation risk for residents and families by securing the site long term.
Stabilised occupancy economics: Replace unpredictable rent reviews with a debt profile that can be matched to cash flow.
Asset growth: Convert rent into repayments that grow the balance sheet and support future expansion or refinance.

When buying may not suit: a lease term that is too short to align purchase and transition, plans to relocate or expand into a different catchment, a development that adds major construction risk, or capital that earns a better return deployed into staffing, accreditation uplift, digital care systems or service mix changes. The decision rests with you.

How an aged care facility purchase is funded

Deposit and LVR: Typical loan to value ratios sit between 65 and 80 per cent for aged care freehold. This implies a 20 to 35 per cent deposit. In some scenarios 100 per cent of the purchase price can be arranged by adding additional security or cross-collateralisation. Stronger asset classes and owner-occupiers are more likely to access the higher end of the range.
Loan term and structure: Commonly 15 to 25 years. Principal and interest is standard for long term stability. Interest only can be arranged for a period where cash flow priority, refurbishment programs or commissioning timelines require it.
Security and serviceability: The property is the primary security. Lenders assess serviceability using business financials, including EBITDAR, occupancy trends, AN-ACC revenue, accommodation payments mix, staffing costs, and sensitivity to wage and compliance changes. Valuation may be on a freehold basis or going concern depending on the purchase.
Owner-occupier treatment: Lenders generally favour owner-occupier purchases because the operating business relies on the premises, which supports continuity and lowers risk.

Common holding structures

Many operators hold the property in a separate entity, such as a family trust or company, which then leases the premises to the trading business at a commercial rent. A lender reads that inter-entity rent as the serviceability line, and the split separates operating risk from the asset while supporting succession planning. The rent is benchmarked to market and aligned to loan repayments and business cash flow.

Some operators hold the freehold through a self managed super fund. Commercial premises generally qualify as business real property, so an SMSF can acquire the building via a limited recourse borrowing arrangement and lease it back to the operating company at market rate, within a concessional tax environment and with asset protection. The trade-offs a lender weighs are lower gearing limits, liquidity requirements, contribution caps and stricter documentation and valuation. The lending is what we structure and place, and your accountant and, for a fund, a licensed SMSF adviser confirm the tax and ownership detail before anything is settled.

What a lender looks at

Business financials and serviceability: Historical and forecast EBITDAR, occupancy levels, AN-ACC revenue profile, RAD and DAP mix, wage ratios, and sensitivity analysis.
Property and valuation: Building condition, compliance with the Aged Care Quality Standards, fire and essential services certification, lift and plant condition, environmental and flood or bushfire overlays, and valuation method.
Location and demand: Catchment demographics, proximity to hospitals and GP networks, transport access for staff and families, and competition.
Deposit and equity position: Cash deposit, ability to leverage your equity in other property, and any vendor terms.
Lease and occupancy: If buying the current premises, existing lease terms and assignment. If partial investment, quality of any third-party tenancies such as allied health or pharmacy.
Management and governance: Accreditation status, compliance history, insurances, and key management capability.

A specialist broker who works daily in aged care can align your lending structure to your operating model and compliance rhythm.

An illustrative scenario

This is an illustrative scenario that shows the kind of situation we can assist with, and how the thinking might run.

Situation: Owner-operator of a 72-bed residential aged care facility in outer Melbourne. Currently renting the freehold, offered to purchase at $12,500,000 with 12 months left on the lease.
Objectives: Secure long term control, fund a staged dementia wing refurbishment, keep liquidity for workforce initiatives.
Options we would map:
- Standard owner-occupier mortgage: Target 70 to 75 per cent LVR on the freehold, 25 to 30 per cent cash deposit, principal and interest over 20 years.
- Adding a second property as security: Pledge additional real estate and directors' guarantees to reduce the cash outlay and preserve working capital.
- Vendor terms: Negotiate 10 per cent vendor finance for 24 months to bridge part of the deposit while refurbishment works complete and cash flow normalises.
- SMSF acquisition: The SMSF purchases the freehold and leases back to the operating company at market rent, with lower gearing and stricter liquidity controls.
Structures we would consider: A property entity holds the asset and leases to the operating company, rent aligned to serviceability, with an option to leverage your equity in a separate commercial property to reduce the cash deposit, and the refurbishment tranche funded as a separate facility.
How we would approach it: We would map indicative lending of $8,750,000 to $9,375,000 as the primary mortgage, depending on valuation and serviceability, interest only for 24 months during the refurbishment then converting to principal and interest. We would model the ranges, structures and repayments with you; the figures above are illustrative, not confirmed outcomes, and the final choice would remain yours.

Ways we can fund an aged care facility business

Beyond the freehold mortgage, we arrange the wider finance an aged care operator draws on:

Asset finance for clinical and facility equipment: Beds and pressure care mattresses, bariatric hoists, nurse call and RTLS, pharmacy fridges, commercial kitchen and laundry plant, generators and solar with storage, funded as aged care equipment finance.
Fit-out and refurbishment finance: Dementia unit upgrades, room reconfiguration, bathroom compliance, air handling and infection control improvements.
Working capital loans: Bridge payroll step-ups, agency staffing peaks and seasonal occupancy shifts without straining operations, with working capital for an aged care facility arranged alongside the mortgage.
Business overdraft: Manage timing gaps between subsidy receipts, accommodation payments and supplier terms.
Refinancing and debt consolidation: Reset facilities for lower repayments, align loan terms to asset life, and clean up legacy security positions.
Construction and renovation: New wings, lift replacement, fire system overhauls, additional car parking and access works.
Business or premises acquisition finance: Buy the freehold, buy into a partnership, or execute a management buy-in aligned to your governance model.

Owning the premises can stabilise rent outgoings and free equity over time, while a refinance can consolidate multiple facilities into a single structure that matches your operating rhythm.

How Ardent helps aged care facility buyers

Ardent Capital Group specialises in commercial mortgages for aged care facilities and nursing homes. We arrange and structure an aged care property loan around how you intend to hold and occupy the building, including trust, company and SMSF pathways where appropriate. Our team services Sydney, Melbourne, Brisbane, Gold Coast, Perth, Adelaide, Canberra and surrounding metro and regional areas. We have helped facilitate over $500,000,000 in funding over a decade for more than 1,000 borrowers. Talk to us when you are ready. We focus on clear structure, sharp execution and optimal financial outcomes.

Questions worth asking

How much deposit do I need to buy my aged care facility freehold? A typical deposit sits between 20 and 35 per cent, aligned to a 65 to 80 per cent LVR. Higher LVRs are possible with additional security.

Will lenders include refurbishment costs for a dementia wing or compliance upgrade? Yes, many lenders will fund a staged refurbishment or upgrade program alongside the purchase, with interest only periods during works and drawdowns against milestones.

Can my SMSF buy the facility and lease it back to my operating company? Commercial premises generally qualify as business real property. An SMSF can hold the freehold and lease it to your operating company at market rent, subject to LRBA rules and liquidity settings.

How do lenders view AN-ACC revenue, RADs and DAPs in serviceability? Lenders focus on the stability of AN-ACC receipts, occupancy and wage ratios. RAD and DAP settings are considered for cash flow timing, not as primary security.

What valuation approach will apply, freehold or going concern? For an owner-occupier buying the building, lenders often instruct a freehold valuation. In some purchases, a going concern approach is used. The correct method depends on contract terms and lender policy.

Is owner-occupier treated differently to investment? Owner-occupier is generally viewed more favourably because the business relies on the site, which supports continuity and serviceability.

Written by

Nick Chong

Managing Director, M.AppFin, Dip. Mortgage Mgmt

Nick holds a Bachelor of Agricultural Economics, a Master of Applied Finance and an Advanced Diploma in Financial Planning. He founded Ardent Capital in 2016 after more than a decade in financial planning and mortgage broking. For the past ten years he has led a team of finance specialists, mortgage advisers, brokers and credit analysts, all working to secure optimal outcomes for clients and always acting in their best interests. The team brings both a qualitative and a quantitative approach to every deal.