How much can a non-Australian borrow for a property?

Any general questions you might have in regards to loans and finance.
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thomas
Posts: 64
Joined: Wed Jun 24, 2009 4:16 pm

How much can a non-Australian borrow for a property?

Post by thomas »

Hi home loan experts!

I am a commercial diver in Sydney and have an annual income of $77,000. I am in Australia on a work visa and I would like to live in Sydney for the foreseeable future. I am currently renting and I want to buy a house of my own. There is a nice two bedroom boutique apartment on Pitt Street that I really like to buy. The place has an asking price of $840,000 and I would like to borrow as much as possible for that.

However, I am not sure how much banks may be willing to lend to me since I am not an Australian. I would be grateful if someone could give me an idea about that.

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Otto Dargan
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Re: How much can a non-Australian borrow for a property?

Post by Otto Dargan »

Hi and welcome to the forums thomas.

It is possible for a non-Australian to be approved for a home loan in Australia. You can use the Non-Resident Mortgage Calculator to work out if you are elegible to get a home loan in Australia. The calculator asks you to enter relevant details including:
  • Whether you are living in Australia.
  • Your visa status.
  • If you are purchasing or refinancing a property.
  • How you will use the property.
  • The value of the property.
You can do the following in order to increase the chances of getting approved for a home loan in Australia:
  • Reduce your loan amount: Lenders consider loans with a high loan to value ratio (LVR) to be risky. If you are able to reduce the LVR to 80% or less then you may always be able to find a lender who will approve your loan.
  • Have genuine savings: Lenders in Australia prefer borrowers to have saved at least 5% of the purchase price in genuine savings.
Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

thomas
Posts: 64
Joined: Wed Jun 24, 2009 4:16 pm

Re: How much can a non-Australian borrow for a property?

Post by thomas »

Thank you for the reply, Otto. However, I do not have any genuine savings. Can I still qualify for a high LVR home loan?

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Otto Dargan
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Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: How much can a non-Australian borrow for a property?

Post by Otto Dargan »

Hi thomas,

Most lenders in Australia now require a borrower buying a property to have 5% of the purchase price in genuine savings that you have saved yourself over time. However, it may be possible to get a home loan without genuine savings.

It may be possible to borrow a high Loan to Value Ratio (LVR) even without genuine savings. We work with lenders who may be able to approve the following types of loan to borrowers without genuine savings:
  • 90% home loans: You may be able to borrow 90% LVR from three different borrowers.
  • 95% home loans: One of our lender may approve a loan for 95% of the property value irrespective of the source of your deposit.
It seems that you have more than 13% of the purchase price for the deposit on your loan. Therefore it may be possible for you to have your home loan approved if you choose the right lender. However, you will have to meet the following criteria for that:
  • You have a stable employment and have been working in the same job for at least six months and in the same industry for two years.
  • You have a good credit history.
  • You have been making your credit cards, rent and loan repayments on time.
  • You are able to afford the loan.
  • You are in a strong financial position.
If you would like to know more about these then you can check out our website. We can also be reached on 1300 889 743 or you can fill in our free assessment form to see if you qualify for a loan or not.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

thomas
Posts: 64
Joined: Wed Jun 24, 2009 4:16 pm

Re: How much can a non-Australian borrow for a property?

Post by thomas »

Thank you for the explanation. It seems the issues behind genuine savings policy are complex. I will call you and talk to you in person to discuss my situation.

appleboy
Posts: 47
Joined: Wed Jul 03, 2013 7:27 pm

Re: How much can a non-Australian borrow for a property?

Post by appleboy »

Hi there, I am also a non-resident looking for a home loan. I am unsure what genuine savings really means. Could anyone explain that to me?

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Otto Dargan
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Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: How much can a non-Australian borrow for a property?

Post by Otto Dargan »

Hi appleboy,

Different lenders may have different criteria on what they consider to be genuine savings. Most of the following may be considered as genuine savings by the lenders:
  • Funds held in a savings account for three to six months.
  • Money that you have saved over the last three months.
  • Money held in a term deposit for more than three months.
  • Equity in another property (only considered by some lenders).
  • Proceeds from the sale of a property (only considered by some lenders).
  • Shares you have held for over three months.
  • The rent you have paid in the last 12 months is considered as genuine savings by three of our lenders.
If the funds that you have are from the following sources then they will not be considered genuine:
  • A gift that you have received from a family member.
  • Advances taken from your wages.
  • Commission from an employer.
  • Funds that you have inherited.
  • Personal loans or other borrowings.
  • Builder discount or finance.
  • Vendor discount or finance.
  • Windfall gains.
  • One-off government payments such as tax refunds.
Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

appleboy
Posts: 47
Joined: Wed Jul 03, 2013 7:27 pm

Re: How much can a non-Australian borrow for a property?

Post by appleboy »

Thanks to your reply, I now understand what genuine savings is. Cheers!

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