The Mortgage Agency
Australian Expat Home Loans
Leaving your home country behind doesn’t mean you’re giving up on your homeland. Many people choose to work and live abroad before returning home to settle down or retire. Just because you’re broadening your horizons doesn’t mean you should give up on becoming a homeowner.
Maybe you want to purchase a new home to return to later. Or, if you’re looking to refinance an existing home, you’ll need to understand what home loan options are available for Australian expats.
Do you want to learn more about expat home loans in Australia? If you’re considering taking out an expat home loan, contact the Mortgage Agency’s expat home loan specialists to schedule an appointment. As expert mortgage specialists, our expat mortgage brokers can help you find the right home loan solution.
What Are Expat Home Loans?
An expat loan is available to Australian citizens or permanent residents living and working abroad but interest in borrowing money to purchase a property in Australia. Expat home loans are specifically designed for Australian citizens residing overseas, allowing expats to leverage overseas income to qualify for a home loan.
The difference between a traditional home loan and an expat home loan is an assessment of income backed up by the relevant documentation. Your overseas income will be assessed differently, with currency fluctuations factored in. The documentation required is more extensive, and the country that you reside in and your current income will directly impact your borrowing capacity.
Why Choose An Expat Home Loan?
There’s power in owning a home in Australia, whether it serves as an investment, gives you a place to call home when you move back, or a combination of both. If your tenure abroad is indefinite, you could rent your Australian property out for passive income to prepare for when you do return back to Australia.
If you rent the property out, you may be able to claim deductions on mortgage interest and a host of expenses related to the property. Additionally, you may be exempt from Capital Gains Tax if you move into the home at a later point in time and use it as your primary residence ( we suggest you speak to a qualified accountant).
Our Expat Home Loan Services
The Mortgage Agency provides specialised advice and tailored solutions for expats looking to purchase a new home or investment property. We can help you on your path to Australian home ownership.
Personalised Consultation
With a team of experienced loan officers on hand, you’re guaranteed a one-on-one service. We will provide you with guidance throughout the loan application process.
We’ll work with you to understand both your financial circumstances and your goals to ensure you take the right path for your investment portfolio.
Tailored Loan Solutions
There is always more than one solution and our loan specialist will work with you to find a loan solution that works for your needs.
You can rest assured you will find competitive interest rates, and you can choose from a range of flexible repayment options.
Simplified Application Process
You don’t need to sweat the application process, we simplify it by assisting you throughout the application process. We’ll ensure you have all the documents and evidence needed to support your application and help you complete the forms.
Dedicated Support
This is a joint effort; we work with you from start to finish, and you can count on The Mortgage Agency experts for ongoing support and guidance. We are proactive communicators, so you don’t need to worry about chasing us for updates; we’ll provide them for you regularly.
How To Apply For An Expat Home Loan?
There are several key steps in the expat home loan application process.Â
The first step is to find lenders that offer expat home loans and compare options. Before you apply, you will need to ensure you meet the eligibility criteria and gather all of the necessary documents they require.Â
Pre-approval will give you clarity on how much you can borrow, which means submitting your documents for the lender to review.Â
In the meantime, you can look for a property that meets your needs and falls within your budget.Â
Then, you can submit a formal application along with the property details. The lender will assess your application, and they may request additional documentation or information.Â
Once you receive loan approval, the lender will outline the terms and conditions of your loan.Â
Finally, you can sign the loan agreement and complete the purchase of your investment property. It’s up to you to make the repayments on schedule, whether it’s a property investment or not.
Which Foreign Currencies Are Accepted?
You likely earn your income in a foreign currency while working and living aboard; that’s something to consider before you apply for the expat home loan. Your lender will analyse your earning capacity before approving your loan application, and each lender will assess foreign income differently.Â
Most lenders factor in a percentage of foreign income as a form of protection against fluctuating exchange rates. There may be a range of foreign currencies a lender does not accept, but there are some common currencies most lenders do accept.
- Canadian Dollar (CAD)
- Chinese Renminbi (CNY) (conditions apply)
- Great British Pounds Sterling (GBP)
- Euro (EUR)
- Hong Kong Dollar (HKD)
- Japanese Yen (JPY)
- New Zealand Dollar (NZD)
- Singapore Dollar (SGD)
- Swiss France (CHF)
- United States Dollar (USD)Â
If you are earning one of the above currencies, your chances of a successful home loan application increase. There are additional currencies that may be considered on a case-by-case basis and depending on lender, however, these come with conditions and may have limitations. If you don’t see your currency listed, speak to a specialist about your options.
Eligibility Criteria and Required Documentation
You need to be an Australian citizen or permanent resident to be eligible for an expat home loan. While some lenders will consider foreign citizen applicants, there will be higher fees and interest rates. The debt-to-income ratio will depend on the lender, and these can vary significantly. The first step to success is ensuring your income is stable and have a solid credit history and proof of employment.Â
As with any loan, you will be subject to credit checks to ensure you can meet the loan repayments. The lender will need proof of employment to confirm that you are working legally abroad.Â
- You will need to provide six months’ worth of bank statements.Â
- Your last two payslips (at least)Â
- VisaÂ
- PassportÂ
- Tax returns – the number of tax returns required depends on the lender.Â
Additionally, you will need an employment letter from your employer within the last six months detailing:
- Your employment contract
- Job responsibilities
- Salary package
- Allowances and fringe benefits
- BonusesÂ
Please note that documents differ from lender to lender
How The Mortgage Agency Can Help?
If you want to purchase your dream home while living overseas, you need help from a reputable lender and the easiest way to get it right is to work with a qualified mortgage broker who can guide you through the process.Â
The Mortgage Agency is a boutique firm based in Sydney. When it comes to home loans, we take a holistic approach and take into consideration your personal situation to ensure that we’re able to get you the right outcome. If you’re an Aussie expat interested looking to get an expat mortgage, we’re ready to help you purchase your new dream home.
Frequently Asked Questions
Your borrowing capacity depends on various factors, including foreign tax rates, income, foreign debts, and fluctuating exchange rates compared to loan-to-valuation ratios (LVRs). Aussie expats typically encounter lower LVRs in comparison to Aussies who live and work in Australia.Â
The maximum Australian citizens or permanent residents living abroad can borrow is 90% of the property’s value. You may face additional factors based on the country you reside in, the currency you earn, and your visa status.Â
Additionally, some lenders will use the Australian tax rate to assess your income, even if you pay a much lower rate in your country of residency.
Yes, as with any loan, most lenders expect you to put up at least 10% of the loan amount in the form of a deposit. You’’ll also need to factor in additional expenses for other costs like lenders mortgage insurance, legal fees, and stamp duty.Â
If you have property in Australia, you may be able to use equity as a deposit. Alternatively, if your parents own property, they can act as guarantors for the loan, which can reduce or eliminate the need to save up for a cash deposit.
Yes, being self-employed doesn’t put you out of the running, but you will only be able to borrow 70-80% of a property’s value. That being said, many lenders refuse self-employed income because it’s difficult to evaluate. Ultimately, it will depend on the country you reside in, the currency you earn, and whether you use you’re using an accountant.
You’ll need to get a letter from your accountant to verify your income. This includes six months of business bank statements and two years of tax returns.
Some lenders may require additional proof or documents or require you to submit a low doc home loan application. Low doc home loans are quite common for self-employed business owners or working professionals with complex tax structures like family trusts.
Unless your partner is a permanent resident holder or an Australian citizen, the majority of lenders will not consider a foreign spouse’s salary. Some Australian lenders may be able to work with a foreign spouse’s income if your salary is the primary source of income and you are legally married.
However, if you do need your foreign partner’s salary to apply for a home loan, then it is best to consult with a certified accountant to understand any extra fees that might be applicable, for example, the Foreign Buyer Stamp Duty Surcharge.
