As you take on better life opportunities abroad, the last thing you want is for your mortgage to hold you back.
If you’re preparing to become an expat, there are a few important decisions to make about your home loan, starting with the biggest one: should you keep your property or sell it?
In this article, we’ll dive deep into your mortgage status once you move abroad. So, let’s get started.
Can You Sell Your Australian Property While Moving Abroad?
Short answer: Yes, you can.
One way of dealing with your mortgage while moving abroad is selling the property and using the proceeds to pay off your home loan. However, this may not be the most optimal solution from a financial perspective.
Because if you do decide to sell your mortgaged property, you accrue expenses such as:
- Break Costs (if you’re on a fixed-rate home loan term)
- Discharge fee when you pay off the loan
- Capital gains tax on any profit made
- Legal fees
- Real-estate agent fees
Note that if you are on a variable-rate loan settled before 2011, you may also have to pay an early repayment fee. All of these costs can eat into any property equity you have built up, leaving you with less money once you pay off the mortgage.
Can You Keep Your Mortgage While You Move Abroad?
Yes, you can keep your mortgage as it is while you move abroad but you can go one-step further and decide to restructure it.
Let’s discuss both.
Keeping Your Mortgage Intact
If you decide to keep your mortgage as it is, you need to inform the lender of your plans. You may also need to provide proof you’re living in Australia at the time such as a recent utility bill.
As long as you don’t plan on making any changes to your mortgage, your repayments will remain the same, so you need to figure out how to pay them from abroad. You can easily opt to set up a direct debit from your foreign bank account or ask a friend or a family member to make the repayments for you.
Do remember that while some banks accept all types of currencies for repayments, some banks accept only certain currencies listed under their policy.
Restructure Your Mortgage
If you’re keeping your property while living overseas, you may want to restructure your mortgage by changing the interest rate, repayment amount, or loan term. Done strategically, this could save or even make you money long term.
Here are your main options:
1. Refinance Into An Investment Property
If you won’t be living in the home for an extended period, refinancing from an owner-occupier loan to an investment loan is often the best move.
A few benefits include:
- Rental income that could cover repayments, reducing the need for international transfers and potentially generating profit.
- Depreciation claims on plant and equipment fixtures, which can provide significant tax deductions and help offset capital gains tax.
- Other tax deductions, including interest payments, council rates, repairs, and maintenance.
2. Cash-Out Equity
If you’ve built equity, you can refinance for a higher loan amount and receive the difference as a lump sum. This cash can be used to pay off debts, renovate, or support your move overseas. Keep in mind, you’ll effectively reset your equity position, as the withdrawn funds are not considered an investment.
3. Switch To Interest-Only
With an interest-only loan, you pay only the interest for a set period and do not reduce the principal. This can free up cash flow, which is especially helpful when adjusting to a new job or country.
4. Take A Repayment Holiday
A repayment holiday allows you to temporarily pause repayments, typically for three to six months or longer in some cases. For this, you need to apply before leaving Australia for peace of mind. Note that interest will continue to accrue during this period, so factor this into your future budget.
Temporary Ban on Foreign Buyers Purchasing Established Homes
The Australian Government has banned foreign investors from buying established homes from 1 April 2025 to 31 March 2027. This applies to temporary residents, expats*, and foreign-owned companies.
You can still buy:
- Newly built or off-the-plan properties
- Vacant land for development
- Properties under the PALM scheme
See what the ban means and your next steps
*Expats: Your eligibility depends on your personal circumstances. We recommend speaking to a solicitor or conveyancer before purchasing.
We Can Help With Your Home Loan Transition
If you are an existing client looking to restructure your mortgage before moving abroad, you may directly contact our mortgage broker with whom you worked previously, or call us at 1300 889 743 , so our post-settlement staff can assist you with your requirements.
If you are someone looking to enquire about refinancing through us, call us on 1300 889 743 or enquire online, and we can discuss your situation with you.