How Does A CBA Expat Home Loan Compare?
Commonwealth Bank of Australia (CBA) is one of the big four banks of Australia and offers a wide range of products and services to its customers. It deals in fund management, insurance, superannuation, investment and brokering services. When different banks offer you a variety of home loan packages, it might be difficult for you to decide. Comparing the packages from different lenders will help you get the loan best suited to your needs. CBA’s lending policy for expats compares favourably to others in many ways, so it’s worth taking a good look at its loan packages before making a final decision. Here is the information you’ll need to make an informed decision on CBA expat home loans.Pros
- Only bank that accepts 90% Loan to Value Ratio (LVR) for expats.
- Offers competitive loan rates to expats, in comparison with other banks.
- CBA considers interest rate discount requests when the loan is processed through a mortgage broker.
- Conducts fully assessed pre-approval.
- CBA assesses loans faster than other banks.
- Foreign income acceptance policy favourable to expats.
- Considers overseas rental income.
- Loans are available to citizens and permanent residents of Australia.
- The widely accepted foreign currencies are British Pound (GBP), Euro (EUR), Hong Kong Dollar (HKD), New Zealand Dollar (NZD), Singapore Dollar (SGD) and Canadian Dollar (CAD). Some of the other acceptable foreign currencies are the Japanese Yen (JYP), Indian Rupee (INR), Indonesian Rupiah (IDR), Vietnamese Dong (VND), Chinese Renminbi (CNY), and United Arab Emirates Dirham (AED).
Cons
- Genuine savings is required if you are borrowing more than 90% of the property value.
- No negative gearing options available on foreign investments
- If expats are self-employed, then their earnings from self-employment aren’t generally accepted.
- CBA applies Australian tax rates when calculating borrowing power. This lowers borrowing power in most cases.
- Offers interest-only loans to some expats, case by case. Does not accept bad credit home loans.
What Are The Different Types Of Loans Available To Expats From CBA?
Australian expats living overseas do not qualify for owner-occupier home loans with CBA, so they need to apply for an investment loan with CBA. Many Australian expats are keen on getting an investment property loan to expand their portfolio and earn a high passive income. Here are some popular expat investment home loans that CBA provides:- Fixed Rate Home Loan
- Standard Variable Rate Loan
- Extra Home Loan
CBA Fixed Rate Loan
This home loan will lock in your interest rate for one to five years and fix your repayments. It includes the following features:- Wealth Package savings, including an interest rate discount
- Protected from interest rate rises during fixed term
- Option to lock in the fixed rate for a fee of $750
- Additional repayments up to $10,000 in a fixed year
- Option to split loan
CBA Standard Variable Rate Loan
This is a variable-rate home loan; features include:- Wealth Package savings, including an interest rate discount
- Link multiple offsets
- Unlimited additional repayments
- Unlimited redraws
- Option to split loan
CBA Extra Home Loan
It is a home loan with a low variable rate. It includes the following features:- Competitive variable interest rate
- Unlimited additional repayments
- Unlimited redraws
- Option to split loan
CBA Investment Property Loan – Client Story
Alice Martin, NSW
Goal
To purchase an investment property using CBA’s home loans
Background
Alice Martin and Oliver Parker are a married couple living in the United States and they have two children. Alice has permanent residency (PR) in Australia and Oliver is an Australian citizen. Alice has been working in a multinational company for the past five years and Oliver started his business over a year after leaving his corporate job. The couple wanted to purchase a property for $990,000 and had saved $433,500 to buy it. The couple wanted to buy an investment property to expand their portfolio and earn passive income.Problem
Alice had a PAYG income, but Oliver had a business in the US. Since he was self-employed, most lenders did not accept his earnings from business as a stable form of income and the couple did not have prior experience with home loans as expats. However, the couple was financially sound and had a home in the US. Moreover, their employment circumstances and income levels weren’t affected by COVID-19. The couple’s solid finances and clean credit history gave them the confidence to buy an investment property in Australia.Solution
The couple wanted experienced mortgage brokers onboard for their home loan, so they contacted Home Loan Experts. We connected them with our expert mortgage brokers, who worked with their team to help them secure a home loan. Here is what our team did to get an expat investment property loan to settlement:- Although Oliver’s business was running profitably and didn’t have any liabilities, the foreign self-employed income could not be used for the assessment, as lenders do not consider it a stable form of earnings. Our brokers, therefore, helped the couple apply for the loan using Alice’s income only.
- Presented payslips and bank statements showing that Alice has a stable income that wasn’t affected by the pandemic.
- The couple had a property in the US that earns rental income
- Our broker convinced the bank to accept half of the rental income, $40,000, as Alice’s portion. This helped increase her borrowing capacity.
- Low LVR of 60% worked in favour of the couple.
- Requested that they reduce the limit of their credit cards to improve their serviceability assessment.
- Filled out all the paperwork on their behalf.
- Frequently updated the couple on any new developments during the loan process.
