Australian Mortgages For UK Residents

personOtto Dargan access_timeDecember 11, 2012

British couple with Australian mortgageAustralian real estate has been popular with British expats and investors for a long time. Many like to move here, either temporarily or permanently. At the moment Australia is also one of the safest property investment countries in the world.

Does buying real estate differ in Australia?

When applying for a mortgage, citizens and permanent residents of the UK are treated just like other foreign citizens, or temporary residents. This remains true unless you are the spouse or partner of an Australian citizen or permanent resident, and are buying a property together as “joint tenants”.

This is not to be confused with “tenants in common”, as legally that is a different type of property ownership. When borrowing in Australia, you can fix your interest rates for up to five years. In the UK, this can typically be for a minimum of two years and up to ten. Within both countries, unlike the US, variable rates are most commonly sought after by customers.

For first home buyers, a grant is available in Australia. Called the First Home Owners Grant (FHOG), Australian citizens and permanent residents can apply for a government subsidy when purchasing their first property.

In the UK, this grant does not exist. However, public sector equity sharing exists in the mortgage sector. It is called HomeBuy. The scheme, called FirstBuy for first time buyers, helps customers find the difference between their deposit and the % value of the property they are borrowing. This is a tax subsidy, and is only available on select new home builds.

Some British mortgage brokers are also able to offer first home buyers 95% low deposit mortgages. However, when buying in Australia it is unlikely you will qualify for a 95% loan. See below for more information on how much you can borrow.

If you would like to know more about Australian mortgages and apply to a bank or lender, you can talk to us. Call 1300 889 743 (when outside Australia call +61 2 9194 1700), or enquire online.

Do specific visas affect our application?

When applying for an Australian mortgage there are many visa types accepted by banks and lenders. The most common of these is the 457 temporary business (long stay) visa. Find out more about which visas banks and lenders will accept on our page about temporary resident mortgages.

Do we need to apply for Australian Government approval?

Citizens of the United Kingdom need to apply for approval from the Foreign Investment Review Board (FIRB). This Australian Government body determines the level of foreign investment, including ownership of property and other investments, in Australia.

How much are we able to borrow?

Foreign investors are usually only able to borrow up to 70% or 80% of the property value (% LVR). If you can borrow above 80% LVR, it is important to remember that you may need to pay lenders mortgage insurance (LMI). In Britain, LVR is known as LTV, or loan-to-value ratio.

As mentioned above, borrowers who are joint tenants with a spouse or partner may be eligible to borrow up to 95% of the value of the property they are purchasing. However, most mortgage applications for residents of the UK are restricted to 80% or 90% LVR.

Apply for an Australian mortgage today!

To apply for a loan, contact us today! You can call 1300 889 743 (when outside Australia call +61 2 9194 1700), or enquire online and our non-resident mortgage specialists will contact you.