You are here: Home / Archives for foreign

Australian Expatriate Mortgage

February 21, 2011 By admin Leave a Comment

Family moving overseasExpatriate Australians or people from overseas that are planning to work in Australia can purchase real estate – either a home or an investment property in Australia.

The type of home loan, interest rate & lenders that you qualify with will predominantly be determined by your residency status. In addition to this lenders will also carry out a normal assessment of your situation including your income, employment stability, credit history (Australian history only), asset position and savings history.

Which visa holders can qualify for a home loan in Australia?

Australian permanent residents (PR) – Holders of all types of visas are eligible for home loans. The government treats permanent residents much like Australian citizens when it comes to purchasing property. Banks will generally lend permanent residents up to 95 percent of the property value unless the resident is living outside of Australia in which case they can usually obtain 80 percent of the value.

Foreign citizens on a 457 visa – Australia’s Temporary Business (Long Stay) – Standard Business Sponsorship (Subclass 457) is also known as the 457 visa. The 457 is the most common type of working visa for foreigners living in Australia. Holders of this type of visa can normally obtain home loans for up to 80 percent of the property value. Loans for up to 90 percent of the value are available for people who have saved part of the deposit and have worked in Australia for at least 12 months.

Foreign citizens on a temporary or spouse visa – Many residents in Australia are spouses of an Australian citizen and have an Interdependency Visa (subclass 310/110 and 826/814) or a Spouse Visa (subclass 309/100 and 820/801). Persons with either type of visa can normally acquire loans up to 95 percent of the property value. Other temporary visa holders can generally apply for mortgage loans up to 80 percent of the property value.

The Home Loan Experts is a specialist mortgage broker in Australia that has extensive experience and a proven track record in helping expatriates to obtain home loans. They work with more than 40 lenders including major Australian banks and are full members of the MFAA & COSL, ensuring , professional and ethical lending practises. You can find out more about their services on their non-resident mortgage website.

Full list of acceptable visas

In addition to visas for spouses and partners, other types of temporary visas are available for international students, athletes, persons visiting for medical treatment and other temporary visitors.

The following is a list of temporary visas that will normally qualify for a mortgage for up to 80 percent of the property value.

  • Business Visitors Visa (Subclass 456)
  • Working Holiday Visa (Subclass 417)
  • Bridging Visas from A to E
  • Entertainment Visa (Subclass 420)
  • Contributory Temporary Parent Visa (Subclass 173)
  • Contributory Temporary Aged Parent Visa (Subclass 884)
  • Visiting Academics Visa (Subclass 419)
  • Sport Visa (Subclass 421)
  • Skilled Exchange Visa (Subclass 411)
  • Film, Media, Actors and Support Staff, Photographers and Journalists Visa (Subclass 423)
  • Emergency Visas (Subclasses 302 & 303)
  • Long Validity Business ETA Visas (Subclass 956)
  • Holiday and Visiting Visas (Subclass 976)
  • Medical Treatment Visa
  • New Zealand Citizen’s Family Members Visa (Subclass 461)
  • Religious Worker Visa (Subclass 428)
  • Special Program Visa (Subclass 416)
  • Sponsored Family Visitors Visa (Subclass 679)
  • Special Category Visa (Subclass 444)
  • Student Visa (Subclass 572, 573, 574, 575 & 576)
  • Student Guardian Visa (Subclass 580)
  • Short Validity Business ETA Visas (Subclass 977)

The types of working visas that banks will normally accept for mortgage loans, possibly for up to 90 percent of the property value, are:

  • Foreign Government Agency Visa (Subclass 415)
  • Diplomats Visa (Subclass 995)
  • Domestic Workers Visa (Subclass 426)
  • Investor Retirement Visa (Subclass 405)
  • Medical Practitioner (Temporary) Visa (Subclass 422)
  • Temporary Business (Long Stay) – Standard Business Sponsorship (Subclass 457)

    • Is approval required from the government?

    For those with working visas, approval from Foreign Investment Review Board (FIRB) may be required depending on the specific circumstances of the visa holder. Generally, so long as you sell the property once you leave Australia, the government will not interfere with your real estate purchases.

    If you are buying an investment property and you are not a PR holder or Australian Citizen then you may be restricted to buying a new property or building a new property. This is a regulation that has been put in place to limit speculation from foreign investors from inflating the value of Australian houses.

    Foreign citizens with temporary visas are required to obtain approval from the Foreign Investment Review Board if they are not staying in the country for more than 12 months. Generally, if you buy a home to live in then you must sell the property once you leave Australia. Many home owners eventually apply for permanent residency and hold on to their property.

    Foreign citizens are not eligible for first home owners grant or other benefits unless they are purchasing the property jointly with an Australian citizen. If they buy with an Australian Citizen or PR holder then FIRB approval is not normally required.

    In many cases, foreign expats can obtain loans that pay higher percentages of the property value by saving money for the mortgage deposit and by waiting until they have lived in the country for more than 12 months.

    For information on getting a loan please refer to a specialise mortgage broker such as the Home Loan Experts, who can help you apply for an Australian expatriate loan, They can lead you through the entire process and optimize your application to improve your chances of getting the best loan.

     Mail this post

Filed Under: Australian Mortgages Tagged With: , , , , , ,

Borrowing in Australia

September 20, 2010 By admin Leave a Comment

Are you planning to buy an investment property in Australia? Many foreign investors are enticed by Australia’s stable property market, reliable growth and availability of credit. So how can you too take advantage of the Australian property market?

1. The basics of investing in Australia

As a foreign investor you will be required to obtain Australian government approval through the Foreign Investment Review Board (FIRB) when you buy. This is a simple process and can be completed through your Australian solicitor or conveyancer. Please note that you will likely be restricted to buying a new property or to buying land and building a house.

Buying existing property is generally not allowed as the government believes it may create asset price bubbles if too much foreign money competes with Australian home buyers. If you are an Australian citizen living overseas then FIRB approval is not required and you can buy any type of property.

You will need to get a conveyancer or solicitor to work for you to handle the legal side of the purchase. Find one that is in the same state as the property that you a buying. Conveyancers hold licences for their state only, so finding one from outside the area will not help you.

You will also need a mortgage broker who specializes in helping foreigners to invest. This article is designed to help you to find a good broker and get approval.

2. Where to buy in Australia?

Most foreign investors buy in the four main capital cities; Sydney, Melbourne, Brisbane and Perth. Although Canberra is technically the capital for the nation many investors prefer to avoid it as it is inland. The relative abundance of land around Canberra may result in prices not rising as strongly as in the coastal cities where land is short.

If you require FIRB approval and are restricted to buying a new building then you may want to consider one of the tourist towns such as Cairns, Townsville, The Gold Coast, The Sunshine Coast or Byrons Bay. These areas are all growing rapidly and there is no shortage of new developments to invest in.

You may want to consider buying in these tourism based areas when the Australian dollar is very high. In particular the Gold Coast and Cairns tend to suffer when the dollar is high because fewer tourists come from overseas. As a result it can be possible to pick up a bargain. Some investors transfer their funds to Australia when the dollar is low and then wait for tourism to go through a quiet period before buying in Cairns.

3. How much can you borrow?

Foreign citizens investing in Australia are generally allowed to borrow 80% of the value of the property. For mortgage loans over $1,000,000 this percentage may be reduced to 70% or even 60% for very large loans.

Australian citizens living overseas can borrow up to 90% or in some cases 95% of the value of the property that they are buying.

4. How do you prove your income?

Whilst in the UK and USA it is common for lenders to rely heavily on a borrowers credit score, in Australia lenders prefer to ask for documents to prove your credit worthiness. Lenders will ask for a range of documents such as payslips, tax notices, letters from your employer or from your accountant if you are self employed.

Some countries do not have much paperwork that can be provided, or the tax returns are in a different language other than English. In these cases the banks can consider a “low doc loan” where you sign a declaration confirming your income and the lender takes your word for it. Although this is considered a sub-prime style of loan in other countries, in Australia this is quite a common way for people to borrow and if you are borrowing 60% of the property value or less it actually has the same discounted interest rates as well!

5. What are the interest rates?

Foreigners applying for a mortgage in Australia do not pay a higher interest rate than residents of Australia. In fact you can apply for the same professional discounts that Australians can get! Most people prefer to choose a variable rate for their Australian loan (similar to an Adjustable Rate Mortgage in the USA) as fixed rates are usually for short terms and are not competitive. Almost all lenders offer fixed rates of up to 5 years, however longer terms from 10 years to 15 years are rarely offered and competition is low.

6. Does your credit score matter?

Your overseas credit score or credit history cannot be accessed by Australian lenders. The banks will search your name in the Australian credit database, Veda Advantage, however they will not penalise you for not having borrowed in Australia before. You will only be penalised if you have defaulted on a loan or credit contract in Australia before. You may be penalised if you apply with too many lenders, the number of enquiries listed on your credit file can damage your Australian credit score.

The banks prefer to look at your asset & liability position, income, debt service ratio and Loan to Value Ratio (LVR).

7. Finding a good mortgage broker

There are two or three mortgage broking companies that specialize in helping foreign investors and Australian expatriates to apply for an mortgage in Australia. The lending policy for foreigner is complex and it is essential that you get the right advice. Most mortgage brokers in Australia do not charge for their services, they are paid by the banks for doing the work that would otherwise be completed by a bank lending officer.

About the Author

Otto is a Mortgage Broker that has specialized in lending to foreign investors & Australian expats for over 7 years. His company the Home Loan Experts is now one of the top foreign home loan broking firms in Australia.

 Mail this post

Filed Under: Australian Mortgages Tagged With: , , ,