The scheme has changed but it’s still possible to borrow!
In April 2017, the Australian government announced that it would be abolishing the 457 visa scheme in favour of the Temporary Skill Shortage (TSS) working visa.
A few things have changed with this temporary visa but the good news is that it’s still possible to qualify for a mortgage with select Australian lenders.
Discover more about how to qualify and how you can improve your borrowing power.
How much can you borrow?
Getting approved while on a TSS visa (subclass 482) will depend on the lender and what stream you’re working under.
As a general rule:
- Medium-Term or MLTSSL stream (4 years): Borrow up to 90% of the property value as a special exception to standard lending policy with a couple of our lenders.
- Short-Term or STSOL stream (1-2 years): Borrow up to 80% of the property value with one of our lenders.
- Married or defacto with an Australian citizen or permanent resident (PR): Borrow up to 95% of the property value if your partner is an Australian citizen or permanent resident (PR) visa holder.
- Visa expiry: As a general rule, your visa must have over 12 months remaining, however, there are some exceptions.
- Medical professionals: If you’re a doctor or medical professional you may qualify for significantly reduced interest rates and waived Lenders Mortgage Insurance (LMI).
- Legal professionals: If you’re a lawyer or barrister you may qualify for reduced interest rates and waived LMI.
There has been a lot of changes to temporary resident lending policy in recent years.
The 482 visa came into effect in March 2018 and is the next development that new migrants need to understand when migrating to Australia.
If you were currently working under a Temporary Business (long stay) 457 visa or another temporary visa and have since switched to the TSS visa regime, give us a call on 1300 889 743 or complete our free assessment form today.
We’ll let you know if you qualify for a mortgage.
Will I be hit with a high interest rate?
Although there are only a few lenders operating in this space, TSS visa holders won’t necessarily have to pay a higher interest rate just because they’re on a temporary visa.
In fact, you may qualify for significant home loan fee discounts and special interest rates that are way below the Bank Standard Variable (BSV) rate.
As long as you’re in a good financial position, with a stable job and a good deposit, you’re potentially eligible for the same discounts as an Australian citizen!
If you’re applying for a smaller amount then you can still qualify for a competitive basic mortgage.
We can help you put together a strong mortgage application with the right lender.
Can I get the First Home Owners Grant (FHOG)?
Unfortunately, FHOG or your state’s equivalent and other government homebuyer benefits aren’t available to TSS visa holders and other temporary workers.
The exception is if you’re buying jointly with an Australian citizen or permanent resident.
Give yourself the best chance at approval
If you’re currently on a temporary working visa, you won’t be affected by the introduction of the 482 visa scheme.
However, non-resident lending policies are still complicated so it helps if you have a mortgage broker to assist you choose the right lender.
You’re more likely to get approved if:
- You have at least a year remaining on your visa.
- Most of your savings are already in Australia.
- You have stable employment in a sought after profession.
If you’ve landed on this page from outside of Australia and you’re considering applying for a skilled migration visa prior to March 2018, be aware that the introduction of the TSS scheme has affected the occupations list.
Check out the Medium and Long-Term Strategic Skills List (MLTSSL) here.
For the Short-Term Skilled Occupation List (STSOL), please visit the Department of Immigration and Border Protection website (formerly the Department of Immigration and Citizenship).
How big of a deposit do I need?
If you’ve spoken to a mortgage broker recently or even your own bank, they may have told you that you can only borrow up to 80% of the property value as a temporary worker.
Not all lenders are the same and most brokers don’t have experience working with temporary residents.
We’ve even made special arrangements with our lenders so you can borrow up to 90% of the property value.
What that means for you is a smaller deposit!
To explain, you’ll typically need around 18% of the purchase price to cover the deposit, stamp duty (state government tax) and LMI, a one off fee charged when borrowing over 80% of the property value.
So for a $600,000 property, you’ll need around $108,000 to cover the deposit and all of the purchase costs.
If you were to borrow at 80%, you’d need around $168,000 or $60,000 more!
Call 1300 889 743 or complete our free assessment form to find out how much you can borrow.
Beware of the stamp duty surcharge
Late last year, the Government introduced a stamp duty surcharge for temporary residents and 457 visa holders in an effort to ease property investing by foreigners.
This surcharge will apply to the forthcoming TSS visa scheme.
The extra duty varies from state to state, ranging from 3% to 7% of the land value.
For example, for an $800,000 property in New South Wales, the total cost of stamp duty was previously $31,490.
It is now $63,490!
Can you avoid the surcharge?
For new migrants planning to make Australia their new home, it hardly seems fair that they should be charged a stamp duty surcharge, particularly if they’re buying an owner-occupied property.
If you’re married or in a spousal relationship with an Australian citizen, buying under their name as joint tenants is one way to avoid the surcharge.
The second way is to buy in an Australian state that doesn’t apply the surcharge.
At the moment, only New South Wales (NSW), the Australian Capital Territory (ACT), Victoria (Vic), South Australia (SA), Western Australia (WA) Queensland (QLD) apply the extra stamp duty.
You could instead buy a property in:
- Tasmania (TAS).
- Northern Territory (NT).
Finally, if you’re only a year or less away from getting PR, you could simply wait in order to avoid the surcharge and save thousands.
The benefit of the last option is that you’ll be able to qualify with more lenders and qualify for even more home loan deals.
Do I need government approval to buy property?
Foreign citizens living in Australia may be required to get approval from the Foreign Investment Review Board (FIRB) before purchasing a property in Australia.
When you don’t need FIRB approval
If you’re buying the property with a spouse who’s an Australian citizen and the legal ownership structure is joint tenants, FIRB approval isn’t necessary.
Many people who buy a home here eventually decide to apply for permanent residency and don’t end up selling the home that they purchased while they were on their working visa.
Don’t worry, getting approval from the government isn’t too difficult as long as you follow their foreign investment rules.
When does FIRB apply?
Not buying with an Australian citizen or your PR is still way off?
You can buy one established dwelling to live in subject to FIRB approval and the payment of a fee.
This fee is $5,000 for land up to $1 million and $10,000 for land between $1 million and $1,999,999.
Higher fees apply after this.
Unfortunately, you cannot buy an established dwelling as an investment property.
You’re also required to sell the property 3 months after it ceases to be your principal place of residence.
Despite this, you can buy a new dwelling without being subject to any conditions including selling the property after you leave Australia.
In fact, you can buy an established dwelling (to use as your primary residence) and purchase as many new dwellings to use as investment properties as you like.
Bear in mind, that you will need to get approval prior to each purchase.
What about DIBP approval?
You don’t need to notify the Department of Immigration and Border Protection (DIBP) of your property purchase in Australia.
We don’t believe that owning property in Australia will alter any decision made by DIBP.
You should refer to your migration agent for more information regarding immigration enquiries.
One name on the property title, two names on the mortgage?
There is method to this madness.
As mentioned, having just the Australian citizen as the sole name on the property title, you can avoid the costs and hassle of FIRB approval and the foreigner surcharge.
However, you might want to still have both names on the mortgage title.
The reason is that, in this way, both incomes can be used when assessing your ability to borrow.
On that note, lenders generally prefer that the Aussie citizen/PR holder is the main income earner.
Some banks will focus on your partner’s Australian citizenship or PR status, rather than your temporary work visa status.
What that means is that these lenders will see you as a lower risk with stronger ties to Australia and will more likely approve you for a 95% home loan.
What will also work in your favour is if you’ve been in a long-term relationship, say 5 years. Having children together or you, as the tempory resident, having family or relatives already living in Australia will also work in your favour.
What happened to the 457 visa?
On 18 April 2017, the Turnbull Government announced that it would be axing the 457 visa, a scheme that has been around for over 20 years.
Since March 2018, the 457 visa scheme has been completely replaced by the 482 visa, a scheme that is split into two new temporary work streams:
- A short-term stream of up to two years: This stream can be renewed for another two years.
- A medium-term stream of up to four years: Only available to specific high-level professionals identified.
Each stream requires applicants to have at least 2 years work experience in the occupation they’re applying for and a criminal history check (previously this was a self-declaration).
Four-year visa applicants specifically need to meet high standards for English proficiency.
According to the government, the TSS visa was introduced in an effort to “support businesses in addressing genuine skill shortage in their workforce” and to safeguard Australian workers.
The skilled occupations list has changed!
Previously, the 457 visa allowed select migrants to fill more than 650 jobs on the Government’s MLTSSL.
Since April 2017, more than 200 jobs have since been cut from this list.
Below is the current MLTSSL list. See if your occupation made the cut:
- Accountant (General)
- Aeronautical Engineer
- Agricultural Consultant
- Agricultural Engineer
- Agricultural Scientist
- Airconditioning & Mechanical Services Plumber
- Airconditioning & Refrigeration Mechanic
- Analyst Programmer
- Automotive Electrician
- Biomedical Engineer
- Boat Builder & Repairer
- Cardiothoracic Surgeon
- Carpenter & Joiner
- Chemical Engineer
- Child Care Centre Manager
- Civil Engineer
- Civil Engineering Draftsperson
- Civil Engineering Technician
- Clinical Haematologist
- Clinical Psychologist
- Computer Network & Systems Engineer
- Construction Project Manager
- Developer Programmer
- Diagnostic & Interventional Radiologist
- Diesel Motor Mechanic
- Early Childhood (Pre-Primary School) Teacher
- Educational Psychologist
- Electrical Engineer
- Electrical Engineering Draftsperson
- Electrical Engineering Technician
- Electrical Linesworker
- Electrician (General)
- Electrician (Special Class)
- Electronic Equipment Trades Worker
- Electronic Instrument Trades Worker (General)
- Electronic Instrument Trades Worker (Special Class)
- Electronics Engineer
- Emergency Medicine Specialist
- Engineering Manager
- Engineering Technologist
- Environmental Engineer
- External Auditor
- Fibrous Plasterer
- Fitter & Turner
- Fitter (General)
- General Practitioner
- Geotechnical Engineer
- ICT Business Analyst
- Industrial Engineer
- Intensive Care Specialist
- Internal Auditor
- Land Economist
- Landscape Architect
- Lift Mechanic
- Management Accountant
- Materials Engineer
- Mechanical Engineer
- Medical Administrator
- Medical Diagnostic Radiographer
- Medical Laboratory Scientist
- Medical Oncologist
- Medical Practitioners (nec)
- Medical Radiation Therapist
- Metal Fabricator
- Metal Machinist (First Class)
- Motor Mechanic (General)
- Motorcycle Mechanic
- Naval Architect
- Nuclear Medicine Technologist
- Nurse Practitioner
- Nursing Clinical Director
- Obstetrician & Gynaecologist
- Occupational Therapist
- Organisational Psychologist
- Orthopaedic Surgeon
- Orthotist or Prosthetist
- Other Spatial Scientist
- Paediatric Surgeon
- Painting Trades Workers
- Physicist (Medical Physicist only)
- Plastic & Reconstructive Surgeon
- Plumber (General)
- Pressure Welder
- Primary Health Organisation Manager
- Production Manager (Mining)
- Production or Plant Engineer
- Project Builder
- Psychologists (nec)
- Quantity Surveyor
- Radiation Oncologist
- Radio Communications Technician
- Registered Nurse (Aged Care)
- Registered Nurse (Child & Family Health)
- Registered Nurse (Community Health)
- Registered Nurse (Critical Care & Emergency)
- Registered Nurse (Developmental Disability)
- Registered Nurse (Disability & Rehabilitation)
- Registered Nurse (Medical Practice)
- Registered Nurse (Medical)
- Registered Nurse (Mental Health)
- Registered Nurse (Paediatrics)
- Registered Nurse (Perioperative)
- Registered Nurse (Surgical)
- Registered Nurses (nec)
- Renal Medicine Specialist
- Roof Plumber
- Secondary School Teacher
- Sheetmetal Trades Worker
- Ship’s Engineer
- Ship’s Master
- Ship’s Officer
- Small Engine Mechanic
- Social Worker
- Software Engineer
- Solid Plasterer
- Special Education Teachers (nec)
- Special Needs Teacher
- Specialist Physician (General Medicine)
- Specialist Physicians (nec)
- Speech Pathologist
- Structural Engineer
- Surgeon (General)
- Systems Analyst
- Taxation Accountant
- Teacher of the Hearing Impaired
- Teacher of the Sight Impaired
- Technical Cable Jointer
- Telecommunications Engineer
- Telecommunications Field Engineer
- Telecommunications Network Engineer
- Telecommunications Network Planner
- Telecommunications Technical Officer or Technologist
- Thoracic Medicine Specialist
- Transport Engineer
- Vascular Surgeon
- Wall & Floor Tiler
- Welder (First Class)
- Welfare Centre Manager
Discover if you qualify for a mortgage
TSS visa mortgages are available if you choose the right lender.
By presenting a strong case, you can even qualify for significantly reduced interest rates and other home discounts.
We have helped thousands of temporary Australian residents on the following visa types:
- Investor Retirement Visa (Subclass 405)
- Temporary Business (Long Stay) – Standard Business Sponsorship (Subclass 457)
- Foreign Government Agency Visa (Subclass 415)
- Domestic Workers Visa (Subclass 426)
- Diplomats Visa (Subclass 995)
- Medical Practitioner (Temporary) Visa (Subclass 422)
Please call us on 1300 889 743 or complete our free assessment form to speak with one of our specialist mortgage brokers about your situation.