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Home Loans For Australian Expats In The UK

Did you know that Australian expats in the UK (United Kingdom) can take out a home loan to buy real estate in Australia?

Not only is the Australian dollar falling but the property growth rate in the UK has dropped in comparison to previous years. It’s the reason why thousands of Aussies living in the UK are choosing to buy a house or an investment property back home.

As an Australian citizen living in the UK, how much can you borrow and what does it take to qualify for a mortgage in Australia?

How much can I borrow?

Australian citizens or permanent residents living and working overseas are considered Australian expatriates (expats).

If you’re able to meet all standard bank lending criteria, Australian expats in the UK can borrow up to:

  • 80% of the property value: If you’re unable to provide acceptable documents that can prove your foreign income such as payslips, or if you’re assessed as a foreigner, banks will generally limit your borrowing to 80% Loan to Value Ratio (LVR).
  • 90% of the property value: Generally required to show proof that you’re in a strong financial position.
  • 95% of the property value: Available to borrowers with high incomes and stable employment. This also applies to Australians with dual citizenship or those married to a foreign citizen.

Some lenders may assess you as a foreigner if you’re married to a UK citizen so the key is to apply with the right lender.

Call 1300 889 743 (+61 2 9194 1700 from outside of Australia) to speak with one of our mortgage brokers who specialises in mortgages for Australians expats in the UK, or complete our free assessment form.

Is British Pound Sterling acceptable to Australian banks?

The Great Britain Pounds Sterling (GBP) is one of the most common currencies that Australian banks and lenders deal with.

As long as you earn a living in GBP, you have a good chance of getting approved for a home loan.

If you earn a living in a currency other than GBP and it’s not on the list on the Australian Expat Mortgages page, you may still be able to qualify for a home loan in Australia!

Keep in mind, there are some restrictions and conditions that may apply such as capping your borrowing at 80% LVR.

How much deposit do I need?

Australians expats in the UK need at least 5% of the purchase price as a deposit.

There are also additional expenses associated with buying property such as stamp duty. This normally adds up to another 5% of the property value. All up, you’ll need at least 10% of the purchase price as a deposit.

Nowadays, most Australian banks prefer that the deposit be saved as genuine savings, which is typically regular savings you’ve made into a bank account for at least 3 to 6 months.

You may not need to prove genuine savings if you have a larger deposit and, if you already own property in Australia, some lenders will consider equity.

Just because you’re an Australian expats in the UK, it doesn’t mean you can’t take advantage of no deposit solutions either, including a 105% guarantor loan.

How can I prove my UK income?

Banks and lenders are more flexible towards Australian expats in the UK than other non-resident applicants.

Even if you’re not living in Australia, most lenders will assess your income as any other Australian resident so, in most cases, you can prove your UK income by providing:

Don’t have tax returns and payslips?

Some lenders may accept a letter from your employer as proof of your income as long as you’re not borrowing more than 80% LVR.

Please call us on 1300 880 743 (+61 2 9194 1700 from outside of Australia) or complete our free assessment form to speak with one of our experts in mortgages for Australians living the UK.

Does Australia have Buy To Let Loans?

The UK and Australia use different terminology. If you’re buying a property in Australia to be leased out then we call this an investment loan whereas in the UK this would be called a buy to let loan.

Australian banks do offer investment loans, however they sometimes come with slightly different lending criteria or interest rates. Usually it’s best to apply with the lenders that both accept borrowers in the UK and who are promoting a special interest rate at that time.

Do I have to buy a new property?

Typically, foreign non-residents are restricted to buying a new property or vacant land.

However, if you’re an Australian expat, you can purchase an existing property or even a commercial property.

You’ll be treated the same as if you were living and working in Australia even if you’re an Australian permanent resident or an expat residing in the UK.

Do I need FIRB approval?

Normally, foreign investors from the UK would require approval from the Foreign Investment Review Board (FIRB) to buy real estate in Australia.

However, this is not a requirement for Australian expats or permanent residents living in the UK.

You won’t need FIRB approval even if you’re buying with a non-Australian citizen spouse!

What home loan features are available?

Australian expats in the UK have access to all of the same home loan features as a normal Australian resident including:

Call us on 1300 889 743 (+61 2 9194 1700 from outside of Australia) or complete our free online assessment form and we can help you select the features that will help you best manage your mortgage in Australia.

Can I get approved with a big four bank?

As long as you meet standard lending criteria, we can usually get Australian expats in the UK approved with a major lender. Approval with a big four bank can little trickier, especially if your spouse isn’t an Australian citizen or a permanent resident.

A major bank may restrict your borrowing to 80% of the property value but, depending on the strength of your application, you may be able to borrow up to 90% of the property value with a major lender instead.

What are the tax implications?

It’s often found that many non-resident investors and property buyers only investigate the tax treatment of their Australian property after they have bought the property!

Even if you get approved for a home loan like a typical Australian citizen, Australian taxation law is a completely different ballgame. For example, if you’re buying property for investment purposes rather than for family use or eventual retirement, then the tax treatment is more important.

The Australian Taxation Office (ATO) generally undertakes a series of tests such as a residency test, physical presence test and domicile test to determine whether you’re a tax resident of Australia or not.

Under Australian tax law, if you’re classed as a tax resident of Australia, your UK income and any capital gains you make are subject to Australian tax law.

If you’re classed as a non-resident instead, only your Australian sourced income and capital gains on taxable properties located in Australia are taxable.

Australian tax laws are often highly complex and may or may not apply to your specific situation.

The HM Revenue and Customs (HMRC) department is the UK’s tax and customs authority. If you want more information about the tax implications or the double taxation agreement between Australia and the UK, you can check out the HMRC website or the ATO website.

It’s recommended that you speak to an accountant or a professional tax adviser before you decide on buying or investing in Australian property.

What is the loan application process in Australia?

The loan application process in Australia generally starts with getting a “pre-approval” from a lender. You’re usually best doing before putting down a deposit on property because there’s no guarantee that you’ll get approved for a mortgage.

A pre-approval is not a full approval either. It’s an approval issued by the lender subject to particular conditions and is valid for up to 90 days with most lenders.

However, as long as your situation and the property security meets standard lending policy, you’re likely to get approved for a home loan.

Unconditional approval or formal approval is granted when the lender has completed a property valuation and can confirm everything about your situation including your income and expenses. To confirm their approval, the bank will issue with an approval letter, which you’ll have to sign and send to the bank.

If you haven’t provided everything to the lender needs the first time around, it can really delay the application process. This is particularly true if you’re an Australian expat so it helps to speak with a mortgage broker that can assist Aussies in the UK with their home loan application.

To ensure a smooth settlement process, it also helps to seek the services of a qualified solicitor. In most cases, settlement takes around 4-6 weeks after the Contract of Sale is signed.

How many Australians are living in the UK?

In the last quarter of 2014, there were around 91,000 Australian expats living and working in the UK.

Since then, that number has ballooned thanks to the UK government’s Tier 2 and Tier 5 visas (Youth Mobility Scheme), which are really popular among young, professional Australians.

The Tier 5 visa specifically allows Aussies to work in the United Kingdom for up to two years but many of them have chosen to remain longer than that to pursue high-paying careers abroad.

Once in the UK, it’s not uncommon for Australian expats to buy property back home due to the exchange rate as well as the rising Australian residential property market.

Speak to an Australian expat specialist today!

Our mortgage brokers specialise in helping Australian expats in the UK apply for a home loan in Australia.

Choosing the right lender is extremely important. Since we have relationships with almost 40 different lenders, we can help you find the right lender for your situation.

Most of the time, we can negotiate a great price as well!

Home Loan Experts is a winner of various industry and consumer awards and we receive regular coverage in the media as an authority in the mortgage industry.

Speak with us today by calling 1300 889 743 (+61 2 9194 1700 from outside of Australia). Better yet, complete our free assessment form and one of our credit specialists will contact you to discuss your situation.

Discover if you qualify for a home loan for Australian expats in the UK!

  • Gaffney

    Will your mortgage brokers be available even after the loan has been set up?

  • Hello Gaffney,

    Yes, we have an entire team dedicated to looking out for our clients even after settlement. Our brokers will be available and we can help you stay updated with competitive rates and deals and also help refinance if that’s parallel with your goals and objectives. You can find out more on how we can help by going through the “Managing Your Home Loan” section on our website:
    https://www.homeloanexperts.com.au/managing-your-home-loan/