What would happen if Queen Elizabeth II applied for a home loan in Australia?

If the banks used common sense, which they don’t, then surely she would get approved? Actually, it wouldn’t be so easy.

Australian banks are required to follow lending standards set by the Australian Prudential Regulation Authority (APRA) and to meet the requirements of the National Consumer Credit Protection Act. And that’s why the Queen would be in trouble…

She’s been on the dole for 60 years

In Australia, you get about $510 a fortnight on the newstart allowance and $840 a fortnight with the aged pension.

That’s nothing. The Queen receives the Sovereign Grant of £36.1 million ($68 million) each year. Despite receiving a generous £5 million raise in the last year, she’s still spending £2 million more than she receives.

Australian banks don’t like lending to people who are receiving government benefits. In fact, it’s actually illegal to lend money to someone who is over committed.

Not only that but banks really look at your employment stability. I guess the Queen is stably unemployed although, if a referendum or coup removed her from power, then she’d probably have trouble finding someone willing to pay her millions of pounds to live in a castle or to wave to a crowd.

Has she pawned the Crown Jewels?

In January this year, there was a lot of hoo-haa about the Queen’s worryingly low cash reserves.

Basically, her money set aside for a rainy day has run out. Does that sound good to our banks? Hell no!

Banks only lend you money when you don’t need it. They’ll give you an umbrella on a sunny day and then take it back the moment there are clouds on the horizon. Well, that rainy day has come.

Banks use the 5 C’s of credit to assess a home loan application. She didn’t do too well for her capacity (that’s income vs expenses). Now it looks like she’s failing on capital (her assets, in particular, cash).

But hang on: doesn’t she own half of England?

Yes, she does. In fact, the Crown Estate is worth around £8 billion.

Isn’t that enough for our banks? Yes, it is enough but still “the computer says no”.

The Crown Estate’s income was surrendered to the UK government in 1760 by George III. So the Queen doesn’t really benefit from it and she doesn’t really control it. That too doesn’t sit well with the banks.

She owns some personal real estate here and there but it’s all in the UK. Australian banks can’t take a foreign property as security, well not for a home loan anyway.

She may not get past border patrol

Does the Queen need a visa to visit Australia?

Good question. Apparently she doesn’t and there’s something in the constitution about it but I really can’t be bothered checking. It’s un-Australian to waste time reading the constitution.

What I do know is that she doesn’t qualify for Australian citizenship because you can’t be a loyal subject of yourself. In addition, she doesn’t have a valid visa which means she wouldn’t meet the bank’s requirements for lending to temporary residents either.

She might get approved as a UK investor but she’d need to get approval from the Foreign Investment Review Board to make sure her investment was in the national interests. Buying a home to live in would technically be outside of the FIRB‘s guidelines but I’m sure the Governor General could pull some strings for her.

And then there’s everything else…

I’m guessing she doesn’t have a credit file in Australia. Privacy laws are preventing me checking this one but I’d say this is a fair bet. Without an Australian credit history she’d have a pretty disastrous credit score.

Then there’s her age. Despite what the occasional story on A Current Affair would have you believe, Australian banks don’t like lending to people who are close to or past retirement age. If things go wrong it is a public relations nightmare for the bank even if the loan made perfect sense at the time that it was approved.

Even if she wasn’t in a difficult financial situation, the Queen would have a lot of trouble proving her income. Her financial situation is far more complicated than us mere mortals could understand. She might have better luck with a low doc loan.

Is the Great Australian Dream out of reach?

While she may have a terrible time trying to get past the banks. I’d say we could get her loan approved by working with a specialist lender that can take a common sense approach. That’s what us mortgage brokers do.

Of course, the bank would need to be comfortable that she had “reigned” in her spending a bit before approving her loan. I wouldn’t want to see one of our banks changing the locks on Buckingham Palace.

P.s. I’ve got nothing against the Queen. She seems nice enough and has outlasted 12 US presidents so she deserves some respect.