If you’re an Aussie, even if you live or work abroad, there’s a high possibility that you still call Australia your home. However, borrowing as an expat can be difficult and confusing. But the good news is that there are various non-bank and bank lenders that provide Australian expat home loans. These loans come with certain terms and conditions, and it’s essential that you’re well versed with them if you’re thinking of applying for an Australian expat home loan.
This article offers a comprehensive guide on Australian expat home loans.
What Is The Purpose Of Australian Expat Home Loans?
Through this loan, Australian expats can receive a mortgage to buy an existing or new investment property, build a new property, access existing equity, or refinance existing mortgages.
How Much Can I Borrow?
The amount you can borrow comes down to several factors. Foreign debts, foreign tax rates, fluctuating exchange rates with loan to valuation ratios (LVRs) going up to 90% determine how much you can borrow. Generally, LVR for Aussie expats is lower in comparison to an Aussie working and living in Australia.
- If you’re an Australian citizen or PR living abroad, you can borrow a maximum of 90% of the property value.
- If you’re self-employed and living abroad, you can receive a maximum Australian expat home loan of 80% of the property value.
You also have to keep in mind that the country that you live in, your visa status as well as the currency you’re earning determine the amount you can borrow.
Will Foreign Currency Be Accepted?
If you’re working and living abroad, you’ll be earning in a foreign currency, and that is a huge consideration when applying for an expat home loan. To approve your loan application, your lender will scrutinize your earning capacity; however, each lender treats foreign income differently. Generally, lenders will take only a percentage of your foreign income. This offers them protection from factors like fluctuating exchange rates.
Some commonly accepted currencies include:
Chinese Renminbi (CNY)-conditions apply
New Zealand Dollar (NZD)
Swiss Franc (CHF)
Japanese Yen (JPY)
Hong Kong Dollar (HKD)
Canadian Dollar (CAD)
Singapore Dollar (SGD)
Euro (EUR)
Great Britain Pounds Sterling (GBP)
United States Dollar (USD)
If you’re earning in the currencies mentioned above, there’s a high chance that your loan will be approved. But if your currency is on the below-mentioned list, you can still be approved for a loan subject to certain limitations and conditions.
- Vietnamese Dong (VND)
- Vanuatu Vatu (VUV)
- United Arab Emirates Dirham (AED)
- Turkish Lira (TRY)
- Tongan Pa’anga (TOP)
- Thai Baht (TBH)
- Taiwan New Dollar (TND)
- Sri Lankan Rupee (LKR)
- South Korean Won (KRW)
- South African Rand (SAR)
- Solomon Island Dollar (SBD)
- Saudi Arabian Riyal (SAR)
- Samoan Tala (WST)
- Qatari Riyal (QAR)
- Philippine Peso (PHP)
- Papua New Guinean Kina (PGK)
- Oman Rial (OMR)
- Norwegian Krone (NOK)
- Malaysian Ringgit (MYR)
- Macau Pataca (MOP)
- Kuwaiti Dinar (KWD)
- Indonesian Rupiah (IDR)
- Indian Rupee (INR)
- Fijian Dollar (FJD)
- Danish Krone (DKK)
- Bruneian Dollar (BND)
- Bahrain Dinar (BHD)
If your currency is not on the list mentioned above, you should contact a lender as some lenders accept any currency.
Do I Need A Deposit?
Generally, you’ll need a 10% deposit. You’ll also require additional funds to pay for property purchasing costs such as Lenders Mortgage Insurance (LMI), mortgage set up costs, legal fees, and stamp duty. Typically, your deposits will have to be in the form of genuine savings.
You can use equity as a deposit if you have real estate in Australia or possess a larger deposit. Additionally, if your parents have an Australian property and are eligible to act as your home loan guarantor, you can take an Australian expat home loan without any deposits.
What Documents Do I Need For An Australian Expat Home Loan?
Like with any other loan, you’ll need proof of income if you’re applying for an Australian expat home loan. Generally, you’ll also need a bank statement of the last six months, the last two payslips along with an employment check and employment letter. Other commonly asked documents include visa and passport as proof that you’re living or working abroad.
If I Am Self-Employed Can I Apply For An Australian Expat Home Loan?
These days, most lenders don’t accept self-employed income as its much easier to evaluate overseas PAYG income in comparison to a self-employed expat income. However, depending on the country you’re living in, the currency you’re earning, and whether you have an accountant or not, you have some options.
Some lenders may allow you to borrow a maximum of 70-80% of property value if you can furnish the following documents:
- A letter from your accountant verifying your income
- Business bank statement of the last six months
- Business or personal tax returns of the last two years
Depending on your lender, you may need to submit additional documents as well.
Can My Foreign Spouses Salary Be Considered?
If your partner is not an Australian citizen or a PR holder, most lenders will reject their income. However, on a case by case basis, some lenders can help you get approved for an Australian expat home loan with your partner’s income.
Depending on the following circumstances, your partner’s income may be considered:
- You’re the primary income earner.
- You’ve been de facto for at least two years, or you’re married.
- You have children with your foreign partner.
- Your partner has Australian ties, such as close relatives.
- Your partner is living in Australia.
- Your partner has a valid visa for Australia.
Do I Need Approval from the Australian Government?
No, you don’t need approval from the Foreign Investment Review Board. Even if your spouse is not Australian, approval is not required.
Conclusion
Australian expat home loan makes it possible for you to purchase your dream property even if you’re living overseas. If you’re planning on applying, you must take help from a reputed and expert lender. You can also compare the services offered by various lenders before choosing the right ones. It’s important that you’re well-versed with the policy guideline and requirements. Before you sign the papers, you must familiarise yourself with every detail of the loan process. With the right lender, your loan process will be smooth and quick.
