Last Updated: 1st September, 2017

Australian Mortgages For New Zealand Citizens

Published by Otto Dargan on December 3, 2012

Many people from New Zealand look to purchase investment property, or to buy a new home in Australia. The options available differ slightly between NZ citizens living in Australia, NZ citizens living in NZ and permanent residents of New Zealand (NZ).

Does buying real estate differ in Australia?

New Zealand citizens living in Australia are treated in the same way as Australian permanent residents. Therefore the banks and lenders will be the same, and the application process is fairly similar. This is because a resident of New Zealand is able to obtain a Special Category Visa (SCV), giving them the same borrowing rights as a permanent resident of Australia.

NZ citizens living in Australia can therefore purchase any type of real estate they desire. This includes investment properties, and old or new homes to live in.

NZ citizens living in NZ and permanent residents of NZ, however, will be treated the same as any other foreign citizens in Australia.

It is also important to remember that unlike NZ, Australia has a capital gains tax (CGT). If you sell a property in Australia this will apply to you, and it is recommended to seek professional tax advice. You are also required to submit an Australian tax return for any investment properties through which you receive rental income.

If you are a New Zealand citizen living in Australia and looking for an Australian property, you can contact our mortgage brokers for more information. Call 1300 889 743 (When outside Australia call +61 2 9194 1700) or enquire online.

How does the application process compare?

In Australia, just like in New Zealand, you apply to a bank or lender, supplying them with the required documentation. Once you apply, lenders assess your financial status to determine whether you are eligible for a loan.

Many people go through a mortgage broker in Australia, and just like New Zealand, this gives the borrower far more chance of their loan being approved. Applying directly to a lender is possible. However, this will severely limit your chance of approval and what deals you are offered. A bank will only offer you its own products!

Interest rates consist of both fixed and variable options, with fixed rates available for up to 5 years in both countries. However the structure or length of the mortgage is different. In Australia, most common mortgages are offered for terms of up to 30 years. The terms are usually up to 25 years with most NZ financial institutions.

How much can we borrow?

Australian banks and lenders also determine how much you can borrow in a similar way to NZ. As well as the gross amount you can borrow, the loan to value ratio (% LVR) is important. This is the percentage value of the property you can borrow. That is, if you purchase a $200,000 home at 80% LVR, you will need a $40,000 deposit and the bank will loan you $160,000. See below for more about the loan to value ratio.

Citizens of New Zealand living in Australia can borrow up to 90% of the value of a property (95% LVR). Most Australian citizens borrow with a variable interest rate. If you borrow over 80% LVR, remember you will be liable for lenders mortgage insurance (LMI), which protects the bank if you default on your repayments. LMI is a one off payment at the beginning of the loan.

In New Zealand, provided you have no other significant debts, you should qualify for a mortgage of up to four times your gross annual income. As a couple, you may qualify for up to five times.

In Australia, your gross annual income is important. However, just like NZ, remember that this alone is not enough to determine how much you can borrow. You can try our different mortgage calculators to get an idea how banks will assess your application.

Do we need government approval (FIRB)?

As holders of their SCV, citizens of New Zealand do not need to apply for FIRB approval. Permanent residents however will need to apply. FIRB, or the Foreign Investment Review Board, is responsible for approving all foreign investment within Australia.

Can we receive the First Home Owners Grant (FHOG)?

Yes, just like Australian citizens and permanent residents, New Zealand citizens living in Australia can apply. It is unavailable, under most circumstances, for an NZ permanent resident. However, if you have a spouse or partner who is an Australian citizen, you may be able to apply under certain conditions.

How will I be treated as an NZ permanent resident?

Basically, like all foreign citizens and temporary residents, this depends upon your visa status in Australia. As a permanent resident of New Zealand, if you would like to find out more, you can go to our section on Australian mortgages.

Find out more and apply today!

Are you from New Zealand and looking for a home or investment property in Australia? We can help! Our brokers are specialists in mortgages for citizens and permanent residents of New Zealand. To find out more you can enquire online, or contact us on 1300 889 743 (When outside Australia call +61 2 9194 1700).

labelCategory: Overseas Borrowers, Temporary Residents