How Does An ANZ Expat Mortgage Compare?
As an Australian expat, you have a lot of things to think about when it comes to financing your investment property back home. One of the biggest decisions is finding the right home loan. With so many options available, it can be tough to know where to start.
ANZ is one of the big four banks in Australia and is open to lending to expats. While the bank offers a wide range of products and features to choose from, its expat lending policy is inflexible in some ways.
Listed below is all the information you need on ANZ expat lending to guide you in making an informed decision.
- Offers competitive loan rates to expats when compared with other banks.
- The maximum Loan-to-Value Ratio (LVR) an expat can borrow is 80%.
- When an Australian expat is paying tax in the host country, instead of taking their gross income and applying Australian tax rates, ANZ factors in their net income while calculating their borrowing power. This benefits an expat when the host country’s tax rate is lower than in Australia.
- Expats are offered the same interest rates as onshore borrowers; no buffer is added.
- ANZ considers interest rate discount requests when the loan is processed through a mortgage broker.
- Conducts fully assessed pre-approval.
- ANZ has a dedicated team whose main job is to locate expats and offer them home loan options.
- Expat loans are made available to citizens of Australia and New Zealand.
- Home loans are primarily offered only to PAYG income-earning expats. ANZ does consider contractors, but only when they are under a single contract working for a single employer.
- Foreign business income is unacceptable.
- If expats do not have to pay tax in their host country, ANZ applies the Australian tax rate to their gross income when calculating their borrowing power. This reduces their borrowing power.
- Factors in only 75% of rental income while calculating serviceability.
- Does not offer interest-only loans to expats.
- Relies on in-house foreign exchange calculator.
- Negative gearing options are not made to expats.
- Does not accept bad credit loans.
- Does not accept Airbnb income.
- If the foreign income is taxed overseas, net income is to be used while calculating the serviceability of the loan.
- If the foreign income is not taxed overseas, gross income is to be used.
- Fixed-rate loan term of up to 10 years
- No change in interest rate throughout the fixed period
- Discounted interest rate without a package fee
- No set-up or ongoing fees
- Discounted interest rate
- Redraw account
- No set-up or ongoing fees
- Found the couple their top match for banks. Of the three options, they chose ANZ, as it gave the best interest rate and features. ANZ also factored in 100% of their income while servicing their loan and offered the highest LVR limit of 80% to expats, which was a plus for them.
- Filled out all the paperwork on their behalf.
- Lisa was getting a pay raise in some months, so she wanted to show that while assessing her borrowing power. But, this was against ANZ’s policy. So, our broker advised her to reduce her credit-card limit from $23,000 to $3,000 for the time being instead. This way, the couple’s combined borrowing power for the home loan increased.
- Liaised with ANZ’s team to ensure they met their Service Level Agreement (SLA) for each step in the home loan application process.
- Gave the couple frequent updates on any developments in the loan process.
Summarising ANZ’s Foreign Income Assessment Policy
What Are The Different Types Of Loans Available To Expats From ANZ?
Home loans are generally of two types: owner-occupier and investment property. While borrowing for an owner-occupier home loan, the borrower must declare that the property will be their primary residence.
As expats are Australians living overseas, they do not qualify for an owner-occupier home loan. So, Most Australian expats are keen on getting an investment property loan and expanding their portfolio to earn a high passive income.
Some of the common types of expat investment home loans ANZ provides are:
The bank does not offer any home loan packages, but it gives you a choice to add extra features to any loan product for a price. So, instead of paying a package fee for multiple features, you get the flexibility to pay for only the features you want.
Below are ANZ’s most popular investment home loan products for expats.
ANZ Standard Variable Residential Investment Loan
This is ANZ’s most flexible home loan product.
ANZ Fixed Residential Investment Loan
This product is a standard fixed-rate loan. You can add variable-loan features to it by paying a certain amount.
ANZ Simplicity PLUS Residential Investment Loan
This is ANZ’s basic variable-rate home loan product.
ANZ Property Investment Loan – Client Story
Andy and Lisa, a couple originally from New Zealand, are currently pursuing their respective careers living in Canada. Andy, 36, is a data scientist working under a reputable company for almost two years. Lisa, 36, is a technical program manager who started working in this position seven months back after gaining nearly five years of work experience in the same field.
As expats who qualify to invest in properties in Australia, the couple had purchased a property that is currently worth $575,000 through a fixed-rate home loan with a specialist lender. Now that the two-year fixed-rate period was ending, they had to decide their next step.
The couple had resorted to borrowing from a specialist lender two years back, based on limited research. They did not entirely know how lending in Australia worked, so they were under the impression that banks would not accept New Zealand expats as clients. Because of this, they ended up paying an extremely high fixed rate and borrowed at an LVR of about 75% (maximum limit with the lender). New to property investment, they did not realise the deal wasn’t the best. As their fixed rate was ending soon, if they chose to refinance with the same lender, they would have to pay an even higher variable interest rate, which would take away from the profit they make on their investment property.
Two years in, and taking another loan from a bank in Australia, they realised they could qualify with an Australian bank for a home loan. So, as the fixed-rate period for their investment property was nearing soon, they decided to refinance with a bank instead of refinancing to a variable rate with their current specialist lender.
As busy working professionals, they did not have the time to research multiple banks or home loans. So, they reached out to Home Loan Experts. We quickly connected them with one of our expert mortgage brokers, who worked with his team to help their case.
Here’s what our team did to get the expat investment property loan to settlement:
This way, our broker and his team could quickly and efficiently get the couple refinanced with ANZ. The loan amount they refinanced their property for was $460,000, $391,500 of which was put towards paying off the existing lender, and the remaining loan amount was cashed out. Additionally, ANZ offered them a refinance rebate of $4,000 and gifted them 300,000 Qantas Frequent Flyer (QF) points. The expat couple got an 80% LVR loan for a term of 30 years, at a 4.04% variable interest rate, which is a far better deal than what their existing lender was willing to offer.
Compare ANZ Expat Mortgages To Other Lenders
Not sure which lender is right for you? Our Home Loan Experts can help!
Talk to one of our award-winning mortgage brokers by calling us on 1300 889 743 or complete our free online assessment form.