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How To Get A Mortgage As An Expat In Australia

Australia has long been a popular choice for expats, particularly the British, given the long-shared history with our former colony, which is still part of the Commonwealth. Thanks to its sunny climate and high standard of living, Australia is top of the list for many expats wanting to make a new life.If you’re considering a move to Australia, you may have relatives with whom you can stay initially, or you might be renting. However, it’s likely that if you want to make your home in the country, you’ll eventually hope to buy a place. What’s the best way to go about this? Can you get a mortgage deal in your home nation to buy somewhere in Australia? What are your chances of getting a mortgage from an Australian bank?

Firstly, you need to take a look at some obvious issues, such as your budget, and what your future plans are. Do you want to sell up back home? Are you buying to let? What sort of loan are you looking for, and what’s available?

Let’s look at some options.

Can I Get A Mortgage For Property Back At Home?

One popular choice among expats is to re-mortgage an existing property, for example in the UK, to free up funds for a deposit or even an outright purchase of an Australian property. This makes a lot of sense – you’ll be dealing with a system with which you’re relatively familiar, and you won’t be selling anything in Britain. This is wise just in case you do decide to come back home, only to find that property prices have shot up and it’s no longer so easy to get a foot on the property ladder.

It’s advisable to speak to a specialist lender (we’ve provided some links below) to give you sound counsel on the intricacies involved in the process. You need a broker who is experienced in dealing with lenders in both countries, as trade treaties between the UK and Australia place restrictions on the ability of lenders to give loans to both sets of citizens. If you’re moving to Australia from elsewhere, you’ll need to check any lending limits with brokers in your home nation. This means that if you’re going down the re-mortgaging route, you are likely to need approval from lenders in both Australia and your home country. There are also some differences between an ordinary mortgage and a buy-to-let. This Transferwise.com blog offers some options relating to the range of products and rates that might be available to you.

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A specialist broker will be able to help you with any snags, such as a preference among lenders for experienced buyers with a low risk track record, or higher interest rates for international buyers.

How About A Loan From An Australian Lender?

It’s well worth looking into any grants that are available. For example, you could be eligible for a first home owner’s grant if you’re thinking of permanent residency. This can entitle you to up to AUD $20,000 to put towards your new place, although this does vary from state to state – remember that Australia is not a uniform block when it comes to buying property, so this advice applies to the process generally.

If you’re a medical professional, there might be specialist loans on offer.

As with everywhere else, how much you’re able to borrow depends on your income, your employment status (or that of your spouse) and your credit rating as well as your residency status and the nature of your visa. For example, temporary residents may be able to borrow less than their permanent equivalents. Australian lenders may not be able to access your credit history in your home country, but they will look into your reliability pretty thoroughly, for obvious reasons, and they may be interested to know if your salary is in AUD or another currency, as currency fluctuations could affect your ability to pay your loan. Being married to an international citizen can negatively impact your chances of getting a loan, for example, which is why it is crucial to speak to an experienced broker.

Some of the larger banks have withdrawn from foreign markets because of concerns about fraud. This is unfortunate as it could negatively affect the range of products available to you as well as your chances of getting a loan. Again, this means it’s best to speak to a broker rather than try to do the research on your own.

You might have to approach the Foreign Investment Review Board, but everyone’s case is different and Australian lenders will obviously approach this on a case-by-case basis. There are other issues, too – whether you’re buying a new property, or if the purchase is thought to support economic growth in a particular region, for example.

Will I Need A Deposit? How About Stamp Duty?

You will need a 5-10% deposit, although this may be higher depending on your visa status. And yes, you’ll also need to be able to afford stamp duty on the purchase price. Lenders will probably check your savings to ensure you’re actually in a position to buy a home. If you’re already in the fortunate position of owning property in the country, lenders may not ask you to prove savings.

Don’t forget that, as with house buying in your home nation, there will be other costs involved in buying a home, such as:

– the lender application fee and lenders’ mortgage insurance
– a mortgage registration fee which goes to the government
– a land transfer fee
– the legal fees from your solicitor
– the cost of the conveyancing
– checks on the structure and pest situation.
– home insurance.

So it’s a question of swings and roundabouts. British expats report that buying a house is easier in Australia than it is in the UK, but as you are from overseas, there is quite a bit of additional red tape.

Further information:
Liquid Expat Mortgages
Expat Mortgages Australia

Have you bought a house in Australia? Share your thoughts in the comments below, or answer the questions here to be featured in an interview!

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