Australian Expat Mortgage Assessment Tool
Australian expats living in the UK can leverage the assessment tool to pinpoint lenders who can help them in securing a mortgage.
Check if you qualify for a home loan as an Australian expat
Is British Pound Sterling acceptable to Australian banks?
The Great Britain Pounds Sterling (GBP) is one of the most common currencies that Australian banks and lenders deal with.
As long as you earn a living in GBP, you have a good chance of getting approved for a home loan.
Not all lenders will accept 100% of your foreign income but we know a few lenders which accept 100% of your GBP income.
If you earn a living in a currency other than GBP and it’s not listed on the Australian Expat Mortgages page, you may still be able to qualify for a home loan in Australia!
Keep in mind there are some restrictions and conditions that may apply.
How much deposit do I need?
Australians expats in the UK need at least 5% of the purchase price as a deposit.
There are also additional expenses associated with buying property, such as stamp duty. This normally adds up to another 5% of the property value. All up, you’ll need at least 10% of the purchase price as a deposit.
Nowadays, most Australian banks prefer that the deposit be saved as genuine savings, which is typically regular savings you’ve made into a bank account for at least 3 to 6 months.
You may not need to prove genuine savings if you have a larger deposit and, if you already own property in Australia, some lenders will consider equity.
How can I prove my UK income?
Banks and lenders are more flexible towards Australian expats in the UK than other non-resident applicants.
Even if you’re not living in Australia, most lenders will assess your income as any other Australian resident. So, in most cases, you can prove your UK income by providing:
Don’t have tax returns and payslips?
Some lenders may accept a letter from your employer as proof of your income as long as you’re not borrowing more than 80% LVR.
Please call us on 1300 880 743 (+61 2 9194 1700 from outside of Australia) or complete our free assessment form to speak with one of our experts in mortgages for Australians living in the UK.
The UK and Australia use different terminology. If you’re buying a property in Australia to be leased out then we call this an investment loan whereas in the UK this would be called a buy to let loan.
Australian banks do offer investment loans. However, they sometimes come with slightly different lending criteria or interest rates. Usually, it’s best to apply with the lenders that both accept borrowers in the UK and who are promoting a special interest rate at that time.
Typically, foreign non-residents are restricted to buying a new property or vacant land.
However, if you’re an Australian expat, you can purchase an existing property or even a commercial property.
You’ll be treated the same as if you were living and working in Australia, even if you’re an Australian permanent resident or an expat residing in the UK.
Normally, foreign investors from the UK would require approval from the Foreign Investment Review Board (FIRB) to buy real estate in Australia.
However, this is not a requirement for Australian expats or permanent residents living in the UK.
You won’t need FIRB approval even if you’re buying with a non-Australian citizen spouse!
Will I be hit with the foreigner stamp duty surcharge?
No, Australian expats in the UK will not pay the foreigner stamp duty surcharge that applies to most Australian states and territories.
However, if you’re married or in a de facto relationship with a foreign partner, you should consider buying the property in your name because you may still be slugged with the surcharge.
If you buy the property in your name but have both you and your spouse on the loan, you will be able to avoid foreign stamp duty.
You can find the lending criteria and advantages of this loan on one on title, two on loan page.
If they are an Australian PR holder living outside of Australia then the rules vary between states. So, it’s best that you and your partner contact the relevant state government.
What home loan features are available?
Australian expats in the UK have access to all of the same home loan features as a normal Australian resident, including:
- Redraw facility.
- Extra repayments.
- Professional package discounts.
- Interest only.
- Salary crediting.
- Loan portability.
- Repayment holiday.
- Loan splitting.
- 100% offset account.
- Line of Credit (LOC).
Call us on 1300 889 743 (+61 2 9194 1700 from outside of Australia) or complete our free online assessment form and we can help you select the features that will help you best manage your mortgage in Australia.
Can I get approved with a big four bank?
As long as you meet standard lending criteria, we can usually get Australian expats in the UK approved with a major lender. Approval with a big four bank can be a little trickier, especially if your spouse isn’t an Australian citizen or a permanent resident.
A major bank may restrict your borrowing to 80% of the property value. But, depending on the application strength, you may be able to borrow up to 90% of the property value with a major lender instead.
What is the loan application process in Australia?
The loan application process in Australia generally starts with getting a “pre-approval” from a lender. You’re usually best doing before putting down a deposit on property because there’s no guarantee that you’ll get approved for a mortgage.
A pre-approval is not a full approval either. It’s an approval issued by the lender subject to particular conditions and is valid for up to 90 days with most lenders.
However, as long as your situation and the property security meets standard lending policy, you’re likely to get approved for a home loan.
Unconditional approval or formal approval is granted when the lender has completed a property valuation and can confirm everything about your situation including your income and expenses. To confirm their approval, the bank will issue an approval letter, which you’ll have to sign and send to the bank.
If you haven’t provided everything the lender needs the first time around, it can really delay the application process. This is particularly true if you’re an Australian expat so it helps to speak with a mortgage broker that can assist Aussies in the UK with their home loan application.
To ensure a smooth settlement process, it also helps to seek the services of a qualified solicitor. In most cases, settlement takes around 4-6 weeks after the Contract of Sale is signed.
What are the tax implications?
It’s often found that many non-resident investors and property buyers only investigate the tax treatment of their Australian property after they have bought the property!
Even if you get approved for a home loan like a typical Australian citizen, Australian taxation law is a completely different ballgame. For example, if you’re buying property for investment purposes rather than for family use or eventual retirement, then the tax treatment is more important.
The Australian Taxation Office (ATO) generally undertakes a series of tests such as a residency test, physical presence test and domicile test to determine whether you’re a tax resident of Australia or not.
Under Australian tax law, if you’re classed as a tax resident of Australia, your UK income and any capital gains you make are subject to Australian tax law.
If you’re classed as a non-resident instead, only your Australian sourced income and capital gains on taxable properties located in Australia are taxable.
Australian tax laws are often highly complex and may or may not apply to your specific situation.
The HM Revenue and Customs (HMRC) department is the UK’s tax and customs authority. If you want more information about the tax implications or the double taxation agreement between Australia and the UK, you can check out the HMRC website or the ATO website.
It’s recommended that you speak to an accountant or a professional tax adviser before you decide on buying or investing in Australian property.
Speak to an Australian expat specialist today!
Our mortgage brokers specialise in helping Australian expats in the UK apply for a home loan in Australia.
Choosing the right lender is extremely important. Since we have relationships with almost 50 different lenders, we can help you find the right lender for your situation.
Most of the time, we can negotiate a great price as well!
Speak with us today by calling 1300 889 743 (+61 2 9194 1700 from outside of Australia). Better yet, complete our free assessment form and one of our credit specialists will contact you to discuss your situation.
Discover if you qualify for a home loan for Australian expats in the UK!