What are the main challenges faced by Australian expats when applying for a mortgage?

Any general questions you might have in regards to loans and finance.
Reagan
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Joined: Mon May 13, 2019 4:16 pm

What are the main challenges faced by Australian expats when applying for a mortgage?

Postby Reagan » Mon May 13, 2019 4:17 pm

Hi, I’m currently in my second year of a three year contract for a Singaporean firm as an IT consultant (data migration, UI etc.). I have an apartment in Sydney which I rent out at $400/week with a mortgage balance of $280,000. I’m looking at picking up another in Melbourne preferably a townhouse as it’s likely that I’ll be moving there at the end of my contract, working for the same firm. I earn about SGD $110,000 per year excluding annual bonuses. What are the main challenges faced by Australian expats when applying for a mortgage?

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Otto Dargan
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Re: What are the main challenges faced by Australian expats when applying for a mortgage?

Postby Otto Dargan » Mon May 13, 2019 4:38 pm

Hello Reagan. Welcome to the forums.

Here are some points you need to consider as an Australian citizen living overseas when applying for a mortgage:

  • Australian citizens living abroad can borrow up to 90% of the property value.
  • Some lenders will use the tax rate of the country you reside in, as opposed to Australian tax rates, which can improve your borrowing power. Other lenders use Australian tax rates when assessing your income, and that can limit your borrowing power.
  • Not all your income is considered by some lenders to allow for possible exchange rate movements. Generally, lenders will use somewhere between 60% to 90% of your foreign income.
  • Foreign business income is not considered by many lenders here.
  • A Power Of Attorney (POA) in the name of the solicitor or family member is required by some banks.
  • Singaporean Dollar is one of the preferred foreign currencies of Australian lenders along with the USD, GBP, EUR, CAD, HKD, JPY, CHF, NZD and CNY.
  • No negative gearing benefits.
  • Loaded repayments on your foreign loans.

Lending policy for non-resident home loans differ from bank to bank.
Give us a call on 1300 889 743 (+61 2 9194 1700 from outside of Australia) or fill in our free assessment form and one of our specialist mortgage brokers will help you get approved for an expat home loan.

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

Reagan
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Joined: Mon May 13, 2019 4:16 pm

Re: What are the main challenges faced by Australian expats when applying for a mortgage?

Postby Reagan » Mon May 13, 2019 5:28 pm

Great. What are the interest rates like? How do I qualify for interest rate discounts?

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Otto Dargan
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Re: What are the main challenges faced by Australian expats when applying for a mortgage?

Postby Otto Dargan » Mon May 13, 2019 5:58 pm

Hi Reagan,

Many lenders don’t offer discounted interest rates for Australian living overseas. However, as specialist mortgage brokers we can often negotiate a substantial discount below the Bank Standard Variable (BSV) with some of our lenders. Depending on the size of the loan and the nature of your situation, bigger or smaller discounts may apply.

You can check out our non-resident interest rates webpage for an indicative rate.

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

Reagan
Posts: 3
Joined: Mon May 13, 2019 4:16 pm

Re: What are the main challenges faced by Australian expats when applying for a mortgage?

Postby Reagan » Mon May 13, 2019 7:54 pm

My solicitor can be my POA and everything else seems pretty straight-forward so far, except I have no idea what is the maximum amount I can borrow?

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Otto Dargan
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Posts: 7585
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Location: Sydney, Australia
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Re: What are the main challenges faced by Australian expats when applying for a mortgage?

Postby Otto Dargan » Mon May 13, 2019 8:26 pm

Hi Reagan,

Exchange rate fluctuations, foreign tax rates, negative gearing benefits and repayments on foreign debts can mean that calculating your borrowing power becomes quite complicated and will vary between lenders:
Most lenders will use:
  • Somewhere between 60% and 90% of your actual income.
  • Australian tax rates even if you’re living in a country without an income tax.
  • No negative gearing benefits.
  • Loaded repayments on your foreign loans. It simply means Australian lender will apply a higher interest rate to your foreign debt as a buffer to make sure if your overseas rates were to rise, you would still be able to afford the repayments.

You can also use our borrowing power calculator to get a tentative figure.
We would have to do a full assessment to get an accurate figure.
Give us a call on 1300 889 743 (+61 2 9194 1700 from outside of Australia) or fill in our free assessment form to find out if you can borrow the amount you need as an Australian expat.

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


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