Will I pay a higher interest rate?
Some banks do not allow people living overseas to qualify for discounted home loans.
As specialist mortgage brokers we can often successfully negotiate a substantial discount below the Bank Standard Variable (BSV) rate with some of our lenders.
You should not pay a higher interest rate for an Australian mortgage, unless you can’t provide evidence of your foreign income.
Which lenders can help with expat mortgages?
This calculator is designed to work out if you are eligible for an expat home loan. It assesses the policies of the lenders on our panel so you know who can help you get approved for a mortgage when you buy property in Australia.
Check if you qualify for a home loan as an Australian expat
Will lenders accept my foreign currency?
Since you’re earning an income in a foreign currency, the first thing you’ll have to work out is whether your currency will be accepted. The most common currencies we deal with include:
- United States Dollar (USD)
- Great Britain Pounds Sterling (GBP)
- Euro (EUR)
- Singapore Dollar (SGD)
- Canadian Dollar (CAD)
- United Arab Emirates Dirham (AED)
- Hong Kong Dollar (HKD)
- Japanese Yen (JPY)
- Swiss Franc (CHF)
- New Zealand Dollar (NZD)
- Chinese Renminbi (CNY) – Conditions apply
For the above currencies, there is a good chance that we will be able to get you approved for a loan. But what if you earn an income in a currency that falls outside of this list?
You may still be able to qualify for a mortgage although restrictions and conditions may apply, such as restricting your borrowing power to 80% of the property value (Loan To Value Ratio).
These currencies may include:
- Bahrain Dinar (BHD)
- Bruneian Dollar (BND)
- Danish Krone (DKK)
- Fijian Dollar (FJD)
- Indian Rupee (INR)
- Indonesian Rupiah (IDR)
- Kuwaiti Dinar (KWD)
- Macau Pataca (MOP)
- Malaysian Ringgit (MYR)
- Norwegian Krone (NOK)
- Oman Rial (OMR)
- Papua New Guinean Kina (PGK)
- Philippine Peso (PHP)
- Qatari Riyal (QAR)
- Samoan Tala (WST)
- Saudi Arabian Riyal (SAR)
- Solomon Island Dollar (SBD)
- South African Rand (SAR)
- South Korean Won (KRW)
- Sri Lankan Rupee (LKR)
- Taiwan New Dollar (TND)
- Thai Baht (TBH)
- Tongan Pa’anga (TOP)
- Turkish Lira (TRY)
- Vanuatu Vatu (VUV)
- Vietnamese Dong (VND)
If your currency is not listed then please contact us as some of our lenders accept almost any currency.
Keep in mind that investment policy changes on a regular basis, including which currencies lenders will accept if expats and foreign investors want to buy property in Australia.
Reach out to our expat mortgage brokers by calling us on 1300 889 743 (+61 2 9194 1700 from outside of Australia) or completing our free assessment form.
A lender on our panel accepts currencies from all countries across the world. This policy is subject to change anytime.
Will I need a deposit?
Australians expats buying a property in Australia will typically need a 10% deposit plus extra funds to cover property purchasing costs including stamp duty, legal fees, mortgage set up costs and Lenders Mortgage Insurance (LMI).
This deposit must usually be in the form of genuine savings.
If you have a larger deposit or you already own real estate in Australia, then you can use equity as a deposit.
Better yet, you can buy a property with no deposit if your parents own a property in Australia and they’re in a position to act as a guarantor for your home loan.
Example of property purchasing costs
Let’s say you want to buy an investment property valued at $600,000 and you have a $72,000 deposit (borrowing 88% of the property value).
Stamp duty for Victoria is around $31,000, transfer fees are $1,610, legal fees are $2,000 and bank fees would be roughly $500 (depending on the lender).
In this example, your so-called funds to complete would be $122,180 including your deposit.
This is just an example so we recommend that you try the property purchasing costs calculator to get more accurate figures for your location.
How can I prove my income?
If your payslips or foreign tax returns are in English then these can be provided as evidence of your income.
Most lenders will require three months of bank statements to show your salary being deposited into your account.
Several of our lenders have specialist non-resident departments with staff that understand most common languages, so even if your documents require translation this is not normally a problem.
A valid work visa is required by several lenders as part of their verification process. This is waived if you are a dual citizen or can provide other evidence that you are permitted to work in that country.
What if I’m self-employed?
If you’re self employed then there are only a few lenders that will accept your income.
It’s much easier to assess overseas PAYG income than trying to work out the income earned by a self-employed Australian expat.
We have a couple of options to assist you depending on:
- Availability of an accountant
- Country you live in
- Your income currency
You may actually be able to borrow up to 70-80% of the property value with a couple of our lenders if you can provide all of the following:
- 2 years personal and business tax returns.
- 6 months business bank statements.
- An accountants letter verifying your income.
The problem with tax rates
Some lenders will use Australian tax rates when assessing your income rather than the tax rate of the country that you’re living in.
Australian tax rates are some of the highest in the world and this can seriously reduce your ability to borrow the amount you need, especially when you consider countries like Hong Kong or Singapore which have low tax rates or the UAE which doesn’t require you to pay tax at all.
Luckily, we have some lenders on our panel that use foreign tax rates which allow you to borrow more. The servicing is based on the Net Overseas income and is not taxed again in Australia.
These lenders will only use foreign tax rates when they can see tax withheld from your payslips. So, the trick to getting the lender to accept these rates is to provide as much income evidence as possible.
This offer is only applicable to the following countries but please give us a call first because there’s no saying how long this deal will stick around:
- United States Dollar (USD)
- Great Britain Pounds Sterling (GBP)
- Euro (EUR)
- Singapore Dollar (SGD) – Conditions apply
- Canadian Dollar (CAD)
- Hong Kong Dollar (HKD) – Conditions apply
- Japanese Yen (JPY)
- Swiss Franc (CHF)
- New Zealand Dollar (NZD)
- United Arab Emirates Dirham (AED) – Conditions apply
- Macanese Patacas (MOP)
What if I’m paid in two currencies?
It’s not uncommon for Australians abroad to earn an income in more than one currency.
This is particularly true of professionals working at large multinationals with offices in many different countries around the world.
If both currencies are on the preferred or secondary currency lists mentioned above, then there are banks that will consider these income sources.
Bear in mind that a different foreign currency exchange rate will apply to each currency type which may affect your overall borrowing power.
If only one or none of the currencies you earn in are in either of the lists, don’t worry. We may still be able to get you approved for an Australian expat home loan.
Your borrowing power
Exchange rate fluctuations, foreign tax rates, negative gearing benefits and repayments on foreign debts can mean that calculating your borrowing power is quite complicated and will vary between lenders.
Most lenders will use:
- Somewhere between 60% and 90% of your actual income.
- Australian tax rates even if you are living in a country without income tax.
- No negative gearing benefits.
- Loaded repayments on your foreign loans.
A lender on our panel offers no loading on the advertised rate. Terms and Conditions apply.
As each lender has a different method of assessing your borrowing power we can usually find a solution.
What exchange rate do lenders use?
When converting your foreign currency into Australia dollars, most lenders will use their own exchange rate, which is more conservative than the current market rate for your currency.
If your foreign currency is not on the preferred or secondary list, the lender will either not accept your currency or apply a reduced rate from XE Live Exchange Rates.
Unfortunately, depending on your currency, this can have a big impact on your borrowing power.
Speak with us and we can let you know if we can negotiate with the lender on what method of foreign exchange they use.
Getting a home loan with a foreign citizen
If you’re married to or in a de facto relationship with a foreign citizen then this will affect the way that some banks see your application.
There are three ways that they could assess your application:
- Assess you both as Australian citizens.
- Assess you both as foreign investors.
- Use the nationality of the highest income earner to determine how to assess your loan
The problem is that if you are assessed as a foreign investor then only a small part of your income will be used and you’ll require a larger deposit.
With some lenders you will also pay a higher interest rate.
You can avoid this by applying with a lender that has a favourable lending policy for someone in your situation.There are some lenders on our panel that accept bonus and commission incomes as well.
Please call us on 1300 889 743 (+61 2 9194 1700 from outside of Australia) or complete our free assessment form and we can let you know which banks will accept your situation.
What about my foreign partner’s salary?
Most lenders will ignore the income of your partner if they are not an Australian citizen or Australian permanent resident (PR) holder.
However, the policy is in a grey area and we’ve helped many clients get approved by making exceptions.
A lender may consider your wife or husband’s income in the following circumstances:
- They have a valid visa for Australia.
- They’re living in Australia.
- They have ties to Australia such as family or close relatives.
- You have children together.
- You are married or have been defacto for over two years.
- You’re the main income earner.
One on title, two on loan
When you get a home loan with a non-australian citizen, you are likely to pay foreign citizen stamp duty.
However, you might be able to avoid it if only the expat or Australian citizen is on the title of the loan while still borrowing with a foreign citizen or non-resident.
As this is a complicated structure, and very high risk, lenders only accept the borrowers who are in a spousal or de-facto relationship.
You can find the lending criteria and advantages of this loan on one on title, two on loan page.
Buying a property in Australia as an Aussie expat?
We’ve created a handy guide for Australians living overseas with everything they need to know in order to buy property in Australia.
- The home loan application process
- The entire property buying process from application to settlement
- The costs involved when buying a property
- Frequently Asked Questions (FAQs)
Choose your lender carefully
The main problem faced by most Australian expatriates is that they have great trouble meeting the requirements to get their loan approved. Did you know that?:
- Some banks need to see your original payslips, tax returns and other documents prior to loan approval.
- There can be significant delays if you choose a lender that does not have a loan processing system that is designed to handle foreign addresses or foreign phone numbers.
- Many lenders will not approve a loan for more than 80% of the property value.
- Some lenders may require you to sign a formal loan offer at the nearest Australian Consulate.
- Several lenders charge higher interest rates if you are outside of Australia.
Call us on 1300 889 743 or fill in our free assessment form today and our experts can come up with the best possible solution for your situation.
Aussie Expat Home Loan FAQs
Do I need a Power of Attorney (POA)?
If you’re overseas then it’s quite handy to have a trusted family member, friend or solicitor that can sign documents on your behalf. A Power Of Attorney (POA) allows them to do this.
Some lenders require you to have a POA that meets their requirements. They may require you to have a POA with a solicitor or a family member which may mean your current POA isn’t accepted.
Other lenders do not accept a POA! This can be a real hassle if you then need to have documents couriered overseas and then you need to attend the Australian consulate to have them witnessed.
It’s a good idea to ask your mortgage broker what the lender’s requirements are before you both decide on a lender.
When do I need to visit the Australian embassy?
No matter the case, you’ll need to have your ID certified at the Australian embassy or consulate in the country you’re living in.
If the lender won’t accept POA for your mortgage loan documents, you’ll have to visit the Australian embassy to witness the signing of the mortgage title.
If you’re purchasing a property as joint tenants, only one of you needs to go to the embassy as long as you can provide your partner’s passport.
The embassy is certifying that the document is true, not that it’s reflective of the person asking for the certification.
Will the Australian embassy charge me?
The Australian embassy will charge a service fee for certifying or witnessing these documents.
These fees will vary depending on the country you’re living in so it’s best to check the specific fee schedule for your country of residence.
Just be warned that they can be in the hundreds of dollars.
Is Australian government approval required?
No, Foreign Investment Review Board (FIRB) approval is not required, even if you are buying with a spouse who is not an Australian citizen (refer to the FIRB guidelines for more information).
Will I have to pay the foreigner stamp duty surcharge?
A surcharge on stamp duty and, in some cases, land tax applies to certain foreigners and visa holders depending on what state you want to purchase your property.
Luckily, Australians living abroad are exempt from these surcharges even if they’re not in the country at the time of contract exchange.
The rules around this may vary so it’s always best to double check with your relevant State Revenue Office.
In particular, if you’re buying with a partner who is a non-Australian citizen, then you may want to consider just buying in your name.
If you’re a permanent Australian resident, then that’s an even stronger reason to check with your state revenue authority.
When is the right time to invest in Australian real estate?
There’s an old saying when it comes to investing in real estate: it’s not about timing the market; it’s about time in the market.
This sentiment is often lost on first-time investors. Case in point was during the 2008 Global Financial Crisis.
Logically, it would have made sense if the Australian real estate market took a dive during this economic turbulence, but this isn’t what happened.
Market weakness in Australia’s capital cities was not felt (marginally) until 2011.
The point is, the years most people think will be a problem is not always the case.
All suburbs and regions move and fall at different times and volatility has historically been relatively low in Australia since 2001.
Ultimately, you cannot time the market and, over the long-term, you are better off moving quickly to invest in growth markets.
Australian expat case study
Jim moved to Shanghai, China to work as a department head for a multinational company.
His profession took him places and he would visit Australia whenever he had time off.
However, he didn’t own a holiday home there, yet.
Even with his high serviceability, assessing his foreign income (HKD) wasn’t a walk in the park.
In Jim’s case, competitive pricing and pre-approval were the main priorities for our broker.
Jim’s salary was not affected at all by the pandemic and was paid into his Australian account after tax.
With stricter policies due to China-Hong Kong tensions, there was a loan-ban on Hong Kong residents.
However, Jim was not a Hong Kong resident; only his employer was registered there.
Using the loophole and leveraging the strengths in Jim’s application, Jim finally secured pre-approval.
It was a win-win for both Jim and us!
We are specialists in Australian expat mortgages!
We’re mortgage brokers who specialise in helping people overseas to buy property in Australia.
Here are a few reasons why you should use our services:
- We’ve helped many customers who are Australian citizens or dual citizens living overseas who want to invest in the Australian property market.
- We will choose a lender that accepts your situation. This way, you can avoid many of the headaches associated with applying for a loan.
- Most of our services are free.
- We know over 50 banks & lenders.
Having an expert mortgage broker in Australia can make all the difference! Please call 1300 889 743 (+61 2 9194 1700 from outside of Australia) or enquire online and our team will contact you to discuss how we can help.