New Zealand Citizen Home Loan
This page is for New Zealand citizens or New Zealand permanent residents (PR) living in either Australia or New Zealand, who would like to apply for a mortgage to buy real estate in Australia.
Can I borrow in Australia?
The amount that you can borrow and the banks that will lend to you will vary depending on your situation:
- Living in Australia: New Zealand citizens living in Australia can borrow up to 95% of the property value.
- Living in NZ: Some lenders will allow you to borrow up to 90% of the property value.
- Living in another country: You may be treated as a foreign investor and have your loan limited to 60% to 80% of the property value.
- Mortgage discount packages: One of our lenders can offer NZ citizens and NZ permanent residents the same professional package discounts that are available to Australian citizens.
Will I pay a higher interest rate?
Some lenders charge a higher interest rate if you are not an Australian citizen. This is particularly true if you are living in NZ or another country outside of Australia.
However in most cases we can get you the same interest rates as an Australian citizen, even if you are borrowing 95% of the property value!
Please call us on +61 2 9194 1700 from overseas, on 1300 889 743 from within Australia or complete our free assessment form and one of our specialist mortgage brokers will call you to discuss your options.
Is Australian government approval required?
No, Foreign Investment Review Board (FIRB) approval is not required for those with New Zealand citizenship who have been to Australia at least once. This is because on arrival in Australia you are granted a Subclass 444 visa which means you are an Australian permanent resident.
New Zealand permanent residents (i.e. not an Australian or NZ citizen) require FIRB approval as they do not have the ability to live in Australia permanently.
Why are so many NZ citizens investing in Australia?
In October 2016, the Reserve Bank of New Zealand put a ‘speed limit’ on their banks that has reduced the number of loans they can approve for investors who have less than a 40% of the purchase price as a deposit.
As a result, NZ property investors have increasingly turned to Australia because they can still buy a property with a small deposit.
What is the Non-Resident Withholding Tax (NRWT)?
If you’re living in NZ and paying interest to someone that lives outside of NZ then you may be liable to pay additional taxes. This is a complex issue that you should discuss with your accountant.
For the purposes of investing in Australian property you either have to choose a lender who meets certain criteria so that you don’t have to pay the tax or be forced to pay the tax yourself.
If you had an interest rate of 4%, you’d effectively be paying 4.4% because of the tax. In some cases, we can choose a lender that allows you to buy with a small deposit and then refinance in 2 – 3 years to a lender that meets the criteria so you can avoid paying the additional tax.
Be careful of stamp duty!
When New Zealand citizens arrive in Australia, they are automatically granted a special visa known as a Special Category Visa (Subclass 444).
This excludes you from having to pay a stamp duty surcharge or FPAD (foreign purchase additional duty). This surcharge will vary depending on the state in which you’re buying, many states do not have a surcharge.
This special visa expires if you’re outside of Australia when the Department of Immigration and Border Protection completes a Visa Entitlement Verification Online (VEVO) check.
To avoid the stamp duty surcharge, it’s important that you’re in the country at the time of settlement.
Are first home benefits available?
The Australian government’s First Home Owners Grant (FHOG) and other benefits are available for permanent residents, as if they were citizens of Australia.
The Australian Department of Immigration automatically grants New Zealanders living in Australia a Special Category Visa (SCV). Because New Zealand citizens are considered to be permanent residents of Australia, they are eligible for the grant.
Please refer to your mortgage broker for information about which benefits are available in your state.
Do you need help with an Australian mortgage? Please call us on +61 2 9194 1700 from overseas, on 1300 889 743 from within Australia or complete our free assessment form and one of our Australian mortgage brokers will call you to discuss your situation.
Can I buy a home or investment property?
Your loan can be used for any kind of residential housing. This includes both a home to live in or an investment property in Australia.
You can also apply for a home loan to refinance your existing loan, release equity or build a property in Australia. Commercial mortgages are available on a case by case basis.
Am I required to buy a new property?
Other foreign citizens are required to buy a new property to comply with Australian legislation. However NZ citizens are allowed to buy vacant land and existing properties as well.
Which banks have the most competitive home loans?
Before you look at which lenders have the most competitive interest rates, you need to consider which can actually approve your mortgage!
There isn’t much point in applying if you’re only going to have your application declined and damage your credit file.
In particular, if you’re living in NZ or are borrowing over 80% of the purchase price of your property, then not every lender will approve your home loan.
For this reason we use different methodology to find you the right lender.
We know which banks have flexible lending criteria for NZ citizen customers.
This means that you may qualify for a home loan from a reputable bank and will not need to apply with specialist or non-conforming lenders.
Why do special rules apply for NZ citizens?
Some Australian banks view New Zealand citizens more favourably because our governments have joint agreements for trade, residency and legal purposes.
In addition to this, our countries share the same credit reporting system known as VedaScore via Veda Advantage.
For these reasons several banks see NZ citizens as low risk borrowers, even when compared to UK or USA citizens.
What if I am a NZ Permanent Resident?
This is more complicated as fewer banks will accept your application. It will also depend on which country you are living in at the time of application. Please contact us to discuss your situation.
What documents will I need to provide?
To find you the best lender for your situation we’ll need to obtain the full details of your situation, including supporting documents such as bank statements, payslips and identification.
We can then work out which lenders will approve your home loan, and let you choose the most suitable mortgage out of those available from these banks.
Apply for an Australian mortgage!
We are mortgage brokers who specialise in helping people without Australian citizenship to apply for loans in Australia. We know which banks can accept your application, and which offer the best interest rates for non-residents.
If you would like to buy a property in Australia and would like to know more about how we can help then please call us on +61 2 9194 1700 from overseas, on 1300 889 743 from within Australia or complete our free assessment form.