Home loans for temporary residents

What’s the easiest path to home ownership for temporary residents in Australia?

Temporary residentsThe lucrative investment and living opportunities found in Australia have made it a second home of choice for many expats, temporary residents and foreign nationals. The opportunity for temporary residents to buy a home using a home loan are available, but certain conditions and extra requirements will have to be met first.

Can temporary residents get home loans in Australia?

Temporary residents of Australia who have been issued a 457 visa are able to qualify for a home loan in Australia. You will need to provide proof that you have a steady source of income and in most cases will need to get special permission from the Foreign Investment Review Board (FIRB).

If those qualifications are met, you will be able to apply for and receive a home loan worth up to 80% of the value of the property. Unfortunately as a temporary resident, you will not be eligible for a First Home Owner’s Grant (FHOG) unless you are purchasing the property jointly with your Australian citizen or permanent resident spouse.

One way to find out what loans may be available to you if you're a temporary resident is through a mortgage broker. You can compare some of Australia's award winning brokers below.

The end of the 457 visa

The Federal Government has announced it will abolish the 457 visa by March 2018. In its place, two new Temporary Skills Shortage (TSS) visas will be launched: a 2 year and 4 year stream. The 2 year stream does not include a path to permanent residency, while the 4 year visa does. If you're on a TSS visa, most lenders will assess your application on a case-by-case basis, and you may need to obtain approval from the Foreign Investment Review Board.

For a full breakdown of lending to TSS visas, head here.

What home loans are available to temporary residents in Australia?

The home loan options being offered to temporary Australian residents are typical mortgage packages that would be available to Australian citizens or permanent residents. The main difference being the cap on the amount you are allowed to borrow and the down payment that is required. Depending on your job circumstances you may be able to qualify for up to 90% of the value of the property. The loan types on offer include:

  • Basic home loan. This features a lower variable interest rate and your choice of 30 year terms or 15 year interest-only payments.
  • Standard variable rate home loan. Features a competitive variable interest rate for your loan and the ability to request to redraw funds from your extra payments.
  • Fixed rate home loan. Allows you to choose terms of one to five years at an interest rate that will not change over the course of the loan.

You can lock in at a low advertised rate and have three months before it can rise. The wide array of options that are available to temporary residents of Australia allows for you to choose the terms that will work best for your budget.

Pros and cons of a temporary resident home loan

Pros

  • Same terms. You are offered the same terms and interest rates as Australian citizens and permanent residents. There are no penalties for your temporary resident status such as higher monthly payments on your loan.
  • All features are available. There are features available including offset accounts and the option to delay your mortgage payments under certain circumstances.

Cons

  • You must receive approval. You will need to obtain approval from the Australian Foreign Investment Review Board before qualifying for a temporary resident home loan
  • No first home owner grant. You can’t access the FHOG unless your spouse or partner is an Australian citizen or permanent resident

Things to avoid when seeking a home loan as a temporary resident

When preparing to apply for a temporary resident home loan, gather as much information pertaining to your employment as possible. Providing proof that you have been employed with the same company for over two years could allow you to borrow up to 10% more.

In addition to preparing your employment history, have funds set aside for extra costs when you purchase the house. There is no waiving of stamp duty if you are a temporary resident.

Australia promotes growth by offering temporary residents easy options for home ownership. With that in mind know that the process for you should not be overly complicated by your status.

FAQ about getting a home loan as a temporary resident

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Marc Terrano

Marc Terrano is a content marketer manager at finder. He's been writing and publishing personal finance content for over five years and loves to help Australians get a better deal.

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10 Responses

  1. Default Gravatar
    SammyMay 22, 2018

    I am a temporary resident holding de facto partner visa 801. Me and my partner are thinking to buy our first home. Are we eligible for first home buyer grant?

    • finder Customer Care
      NikkiMay 22, 2018Staff

      Hi Sammy,

      Thanks for your message and for visiting finder – the leading comparison website & general information service built to give you advice in your buying decision needs. How are you doing today?

      Congratulations! What exciting adventure awaits! :)

      The eligibility criteria for first home buyers differs slightly between the states and territories but generally, eligibility criteria includes:

      You must be a first home buyer as a person, not as a company or trust.
      At least one applicant must be a permanent resident or Australian citizen.
      Each applicant must be at least 18 years old.
      You or your spouse, partner or co-purchaser must not have previously owned an interest in land in Australia which had a residence on it, before 1 July 2000.
      You or your spouse or partner cannot have lived in a residential property which you owned from 1 July 2000.
      You or your spouse, partner or co-purchaser may not have claimed the grant previously.
      You must occupy your first home as your principal place of residence within 12 months of the construction or purchase of your home and the minimum period of occupancy is six continuous months.

      There are other state-specific conditions as well, which will depend on the state you’re buying in. For more information, you check it here.

      Hope this was helpful.

      Cheers,
      Nikki

  2. Default Gravatar
    SharadMarch 15, 2018

    I am on 489 visa recently migrated to Adelaide from india in Jan 2018. Started own software company. Planning for buying some property in Adelaide. So looking for loan if possible.

    • Default Gravatar
      LiezlMarch 28, 2018

      Hi Sharad,

      Thanks for visiting finder!

      As mentioned on above, most home loan products available to citizens and permanent residents are also offered to temporary residents, provided that you meet the eligibility criteria and receive Australian Foreign Investment Review Board’s approval. To compare your loan options, simply entered the loan details on this page.

      If you’re still undecided which home loan product suits you best, you can speak to a mortgage broker who can take into consideration your current situation and help you find a suitable lender.

      I hope this helps. Feel free to drop us a note if you have other questions.

      Cheers,
      Liezl

  3. Default Gravatar
    PoobalenMarch 11, 2018

    Im on 489 visa do i need to get FIRB approval?
    Can I use my overseas income details to purchase property in Australia?

    • finder Customer Care
      MayMarch 21, 2018Staff

      Hi Poobalen,

      Thanks for your question.

      Since you’re on a 489 visa (non-resident), yes, you’d need to get approval from the Foreign Investment Review Board (FIRB) if you intend to purchase a property in Australia. If you’re purchasing a property through a home loan, your overall financial situation will be assessed by the lender so it’s their discretion whether to accept your overseas income or not. In case, you’d like to know your options for a loan, best to speak to a mortgage broker.

      Cheers,
      May

  4. Default Gravatar
    ChrisOctober 30, 2017

    Hi, I bought a house and got a 30 year loan before all the FIRB and 457 changes. Still on a 457 and would like to refi to a lower rate. Which banks offer loans to temp residents? We’re also anticipating getting PR soon.

    • finder Customer Care
      JudithOctober 31, 2017Staff

      Hi Chris,

      I hope all is well with you today. Thanks for contacting finder, a comparison website and general information service.

      You may check a list of options which include banks on this page. If you plan to speak to a mortgage broker, you may view a list of options on this page.

      Please note that lenders vary in their policies regarding 457 visa holders, but you can generally obtain finance if you have a stable job in a profession that’s in demand, if you have a year or more remaining on your visa and if the majority of your savings are in Australia. However, if you plan to apply for permanent residency, you may want to wait to apply for a home loan, as securing finance is significantly easier for permanent residents.

      I hope this helps.

      Best regards,
      Judith

  5. Default Gravatar
    WhattersOctober 18, 2015

    Hi I have found a house and require $897000 as a home loan of the $1020000 purchase price (12% deposit). I can afford to pay LMI and my full $86700 stamp duty fee too. I also have FIRB approval.
    Thanks Whatters

    • finder Customer Care
      MarcOctober 19, 2015Staff

      Hi Whatters,
      thanks for the question.

      You might want to compare home loans or speak to a mortgage broker to see which loan options may be available to you.

      Regards,
      Marc.

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