Are home loans available to Australian expats?

Buying a house is a dream for many Australians, no matter where they live or work. While people residing in Australia may find it easier to approach a local lender for a mortgage, those living overseas may need to contact lenders by phone or email to apply for home loans, except whether the lender has an office in their area.

In addition, regardless of the currency in which they are paid, expats should apply for a loan in Australian dollars, which requires taking into account the prevailing exchange rates. As a result, lenders may require expats to put up a larger deposit and pay interest at higher rates. If you are buying property in Australia while living abroad, consider finding a lender that specializes in home loans for Australian expats.

How much can an Australian expat borrow through a home loan?

Whether you are an Australian citizen, permanent resident or expatriate, the upper limit on the amount you can borrow will be based on your income, savings and debts according to the Australian dollar equivalent, taking into account any fluctuations foreign exchange rates. .

Some lenders only consider income earned in specific foreign currencies when evaluating a home loan application. For example, a lender may accept British Pounds, Euros, or US Dollars, but not United Arab Emirates Dirhams, Saudi Riyals, or Indian Rupees. The tax you pay on your income can also make a difference, as lenders may consider your income taxed at Australian rates when estimating your borrowing capacity.

The loan to value ratio (LVR) offered by the lender may be lower for expats than for people living in Australia, requiring the borrower to save a larger deposit. For example, a Sydneysider can get approved for an 80% LVR home loan, while a London-based Australian citizen can only get a 60% LVR loan for the same property.

An expat’s home loan application would be subject to a similar review as an Australian resident, and you would still need to submit documentation proving your income, creditworthiness and savings. Some lenders may ask you to prove that you are authorized to work abroad and that you have the necessary visa or dual citizenship.

How is an Australian expat home loan different from an Australian resident mortgage?

Besides exchange rates and tax rates, lenders may also have different policies regarding the application process, how you earn your income, and who co-borrowers may be. As an expat, you may not be able to go to a bank and sign the application in person. So remember to check with the lender about their signature and submission policies while discussing other loan terms.

You should also know how lenders assess your application if you are self-employed or earn your salary in more than one currency. On the other hand, you may find it easier to take out a mortgage if you already own a property in Australia and can leverage its equity.

If you are applying for a mortgage with a partner or friend, their citizenship or visa status may also affect your application, especially if they are an overseas citizen without an Australian working visa. In Australia, the Foreign Investment Review Board (FIRB) sets policies for buying properties for people who are not Australian citizens or permanent residents, which can affect how lenders treat their income and assess their power. of borrowing. Applications from such borrowers may also be reviewed by relevant government agencies before the lender can approve the loan.

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