Home loans for Australian expats
Australian expats living and working overseas can get a home loan to buy property in Australia. Here's how it works.
Key takeaways
- If you're an Australian expat and you need a mortgage to buy a property in Australia, can you readily get a home loan?
- The good news is that a lot of banks and non-bank lenders offer Australian expat home loans.
- However, there are certain terms and conditions attached to these mortgages that you should be aware of before you apply for a loan.
Which lenders offer mortgages for Australian expats?
A few Australian lenders offer loans to expat Australians.
- ANZ. One of Australia's Big Four banks, ANZ has a dedicated team offering mortgages to Australians living overseas, enabling them to buy and invest in the Australian property market without needing to travel back home.
- loans.com.au. This Australian online lender has an Ex-pat home loan product for Australian and New Zealand citizens.
- UNO. A mortgage broker, UNO can help Australians who live abroad apply for home loans.
- Specialist brokers. There are mortgage brokers who specialist in advising expatriate clients.
Get in touch with a mortgage broker in Australia
Mortgage tips for Australian expats
"An Australian citizen living and working overseas can certainly borrow for a purchase here," says mortgage broker Derek Haas from Haas Associates Loans & Leasing.
While there's a widespread belief that expats will need to obtain approval from the Foreign Investment Review Board (FIRB) before they can buy property in Australia, this is simply not true. This applies to non-Australian buyers.
The interest rates and fees for expat home loans are generally the same as those any Australian living here could access, but some lenders do charge higher interest rates. Specific terms and conditions also apply to these types of loans, so it's important to compare your options before submitting an application.
How foreigners can buy investment properties in Australia
Understanding your options
The amount you can borrow with an expat home loan depends on the lender you select. Expats may have a lower loan-to-value ratio (LVR), meaning they may need a bigger deposit than a local borrower.
Jordan Papadopoulos, founder and former director of Pendo Finance, explains that the LVR available for Aussie expats is generally lower than the amount an Australian citizen living and working in Australian could borrow.
For example, if you have 2 clients looking to purchase the same 3-bedroom home in Melbourne:
- Expat: Maximum LVR could be 60% with lender ABC.
- Citizen: Maximum LVR could be 80% with lender ABC.
"As a result, expats will be required to hold a much higher deposit and/or use equity from other properties owned within Australia," Papadopoulos says.
How do banks treat foreign income?
One of the main issues to consider when you apply for an expat home loan is that you will be earning income in a foreign currency.
Most Australian lenders will only accept a certain percentage of your foreign income, which allows a lender to protect itself against factors such as fluctuating exchange rates.
"PAYG applicants will need to be paid in one of the major currencies, for example, GBP, Euro or USD," Haas says. "The lender here will take 80% of that income – some take 80% of net, some 80% of gross – and use that for servicing the loan."
Some of the commonly accepted currencies for foreign income when applying for an Australian expat home loan include the following:
- British pound sterling
- US dollar
- Euro
- Singapore dollar
- New Zealand dollar
- Canadian dollar
- Hong Kong dollar
- Japanese yen
- Chinese yuan renminbi
- United Arab Emirates dirham (AED)
What other evidence and documentation do banks require from expats?
Just like with a regular home loan, you'll need to provide proof of income to be approved for an expat home loan.
"At a minimum we require 6 months of bank statements, your last 2 payslips and an employment letter and an employment check will also be completed," Papadopoulos says. "Most lenders will no longer accept self-employed income."
Most lenders also require other supporting documentation such as copies of your passport and visa showing that you are allowed to live and work overseas.
What if you're married to a foreign citizen?
If you're married to or in a de facto relationship with a foreign citizen, and only the Australian applicant's earnings are being used to service the loan debt, this won't be an issue. But if both you and your partner's income will be used to pay off the loan, the lender may treat the application differently.
"If you're married you will automatically need to declare the marriage on the lending application. If you are married to a foreign citizen and the lender does not accept their income, this could potentially impact your approval," Papadopoulos says.
- Some lenders will refuse to accept any income from a foreign resident.
- Others will assess you both as Australian citizens or potentially class you both as foreign investors.
- Depending on how they classify your application, the interest rate may be higher.
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Which banks in Australia would accept mortgage application from non PR, with a 5- year 485 visa. The applicant is a full time registered nurse working in hospital
Hi John,
Non-residents can buy property in Australia but you’ll first need to apply for approval through the Foreign Investment Review Board (FIRB).
You can check our guide on how to apply for permission with the FIRB as a reference. You can also reach out to FIRB for more information.
Then, you can check our page on home loans to see the available lenders, or speak with a mortgage broker to get personalised advice. Their service is free and may help you find a loan that suits your unique situation.
I hope this helps!
Thanks,
Sarah
I am apermanent resident of Australia and retired from one of the United Nations Agencies.Can I have homeloan with my retirement income?
Hi Olive,
Thanks for your inquiry.
Yes, you can definitely get a home loan in Australia. You may refer to our guide to home loans for pensioners for ways on how to get a home loan on a pension.
I also recommend getting in touch with a licensed mortgage broker. A broker can help you understand your financial position and they can leverage their panel of networks to find a lender that is more inclined to review your application.
Hope this was helpful.
Cheers,
Nikki
Hi
I am an Australian permanent resident since 2006, and I have been working overseas for an ASX-listed subsidiary for the past three years. Will I be able to get a home loan?
Hi Zam,
Thanks for reaching out.
Yes, you may be eligible to apply for a home loan. However, you’ll need to check whether the bank has any lending restrictions imposed that will have an impact on your ability to qualify for a home loan.
It will be a good idea to enlist the services of a mortgage broker who is familiar with the lending criteria and process and has access to many different loan options.
Cheers,
Liezl
Hi, We are Australian citizens living in Australia who currently have an Engineering consultancy business that generates its income from overseas (100% foreign income). We are wanting to use our business (trust account) to purchase a property in Australia – is there a bank that will lend us money?
Many thanks
Hello Debra,
Thank you for your inquiry today.
You can check your options for home loans designed for self-employed. You can put on the comparison table the amount you wish to borrow and the term, then click “Calculate” orange button to have the figures updated and know the rates of each lender.
Alternatively, you may also consider low-doc home loans.
Hope this helps.
Cheers,
Jonathan