National Australia Bank (NAB) is one of the big four banks in Australia. It offers a wide range of financial products and services to customers of all scales and holds a large share of the home loan market. Because of its large size, people generally think it’s safer to deal with NAB. Check out our review of NAB Home Loans, and let’s go through some questions you might have as an Aussie expat looking to borrow with NAB.
Can I Borrow With A Foreign Partner?
Yes you can. You can apply for a joint home loan as long as one applicant is an Australian citizen or permanent resident, or a New Zealand citizen who’s living in Australia and earning Australian dollars. In these cases, the foreign partner must hold a partner/spousal resident visa.
How Much Can I Borrow?
Can borrow up to 80% of the property value: Australian citizens and permanent residents, and New Zealand citizens living and earning in Australia. When borrowing 80% or less, Lenders Mortgage Insurance (LMI) is not required.
Can borrow up to 70% of the property value: joint applications. At least one applicant must be an Australian citizen or permanent resident, or eligible New Zealand citizen.
Can borrow up to 70% of the property value:
- The Business Owner (Provisional) visa (subclass 160)
- The Senior Executive (Provisional) visa (subclass 161)
- The Investor (Provisional) visa (subclass 162)
- The State/Territory Sponsored Business Owner (Provisional) visa (subclass 163)
- The State/Territory Sponsored Senior Executive (Provisional) visa (subclass (164)
- The State/Territory Sponsored Investor (Provisional) visa (subclass 165)
- Temporary Work (Skilled) visa (subclass 457)
- Temporary Skill Shortage Visa (subclass 482)
What Loan Types Does NAB Offer Overseas Borrowers?
NAB offers these home loan types for its expat borrowers:
- NAB Choice Package: This package offers a wide range of benefits and discounts, like a credit card and discounts on interest rates.
- NAB Tailored: This loan offers competitive fixed interest rates on home loans for terms of up to five years, with features like flexible repayment options and offset accounts.
What Additional Policies And Requirements Does NAB Have In Place For Expats
- Customer identification: Must be validated by an Australian embassy, high commission or consulate. If the proof of identification is not in English, it must be accompanied by translation from a local translator accredited by the National Accreditation Authority for Translators and Interpreters.
- Income shading: 40% shading applied on foreign income.
- Currency conversion: All income has to be converted to Australian dollars using NAB exchange rates.
- Australian tax: Income tax may be applicable on foreign income, if the supporting documents do not provide net income after foreign taxes.
- Matched statements: Income on consecutive payslips must match salary credits on the bank statement.
- Employment verification: This is done independently by expats themselves. Documents required for this are payslips matching with bank statements and a letter of employment confirmation from the employer.
- Variance in income amount: if there are variances in income, the lowest amount is used and shaded for assessment.
| Pros | Cons |
|---|---|
| Provides competitive interest rates. | 40% income shading, which makes customer serviceability very low. |
| Accepts PAYG incomes. Full-time, part-time and contract base PAYG are accepted. | The Australian tax rate used when determining serviceability is applied to gross income |
| No Lenders Mortgage Insurance (LMI) | Maximum Loan-to-Value(LVR) rate is 80%. Other banks offer a higher LVR to expats. |
| No genuine savings required. | Self-employed applicants are not accepted. |
| Accepts electronic signatures on letters, forms and agreements for home loan applications. | Non-base income is not accepted. This includes foreign rental income, commissions, bonuses and overtime. |
| Accepts most foreign currency income. | Doesn’t provide construction loans. |
| Flexible and personalised repayment options with weekly, fortnightly or monthly payment schedules. |
Final Thoughts
NAB tries to cater to the expat niche by offering great rates. However, its assessments are very tough. The 40% income shading makes it hard for many clients to pass the serviceability calculator with a good score. With income tax taken into account as well, the value drops even further. This keeps some clients from getting a home loan with NAB.
