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Buying Down Under? Home loan guide for Aussie expats

Don't worry - you can still invest in Australia while living overseas. Talk to us for peace of mind about your investment properties.
Credit: Philip Kämmerer, Unsplash

Buying a house in Australia while living overseas? No problem. In this article, we’ll go through your options for a home loan as an expat, whether you’re looking for a home to live in or an investment property.

What you’ll need

As a general rule of thumb, it is easiest to secure a home loan if you have a stable income and good credit history. You’re also much more likely to get one that suits your situation if you’re aiming to borrow no more than 80% of your property value (or 80% Loan-to-Value Ratio).

At the same time, as a non-resident you will need to jump through a few hoops to get a home loan approved.

First, make sure you can finance a property in Australia. You can do this by consulting a mortgage broker.

Second, it’s a good idea to focus on getting your loan pre-approved before looking for a property. Approval can take some time and good homes go fast. You don’t want to set your heart on a place only for it to disappear before you’ve got a loan lined up.

Third, you will need to meet strict documentation requirements. Tap ‘More information’ below to learn more about what’s involved.

More information

The exact requirements vary between banks and other lenders. Usually, you will be asked to provide:

  • Passport
  • Visa showing you are permitted to live & work overseas
  • Last 2-4 payslips
  • Six months' worth of bank statements
  • Employment letter and/or other proof of employment

Fourth, the currency of your income may affect approval from some lenders or reduce the maximum amount you can borrow.

More information
  • Lenders will often apply Australian tax when assessing your income. This will affect how much you can borrow.
  • If your income is in one of the commonly accepted currencies, you will have an easier time getting approval. The most commonly accepted ones are:
    • British Pound
    • Canadian Dollar
    • Chinese Yuan Renminbi
    • Euro
    • Hong Kong Dollar
    • Japanese Yen
    • New Zealand Dollar
    • Singapore Dollar
    • US Dollar
  • You'll only be able to borrow 90-95% of the property value (90-95% Loan-to-Value Ratio) if your income is in one of the commonly accepted currencies (listed above)
  • Some currencies are not recognised by lenders as assessable income, reducing the amount you can borrow
  • Lenders may have restrictions on the amount you can borrow based on the currency of your income
  • If your income is in a currency of lower value than the Australian dollar, this will affect how much you can borrow

If you’re an Australian citizen, you do not need to go through the Foreign Investment Review Board (FIRB). There is a lot of confusion about this, as non-citizens, such as foreign investors and temporary visa holders, are required to go through FIRB. You are free to buy an existing or new property or vacant land to live in or rent out.

There are a few other factors that may affect getting a home loan. If your partner isn’t an Australian citizen and you’re planning to pay off the loan with both of your incomes, you may have trouble getting approval. If you’re concerned about this, come to us for help with figuring out your options.

Buying a home while overseas

Buying a home to move into someday is a wise move. It will make moving back to Australia a lot easier and less stressful. At the same time, you should keep in mind what makes a good investment property when planning your budget and looking for properties. You may not thinking of your future home as an investment property. However, having a property you can rent out, even if not now, is a huge advantage. An attractive rental property is a great option to have in case your financial situation changes. Read the next section for more information about buying home to rent out while overseas.

Buying an investment property while overseas

If you’re planning to buy an investment property, there are a few things you should know.

This is also why we highly recommend you visit the property in person if possible. Visiting in person will help you note any repairs or improvements needed to attract a tenant. It’s worth the plane fare.

Looking for your dream home and an attractive rental property are often very different. Even if you’re planning to live in your property someday, you need to consider the needs of your tenants. This is because renters often have different needs to buyers, so their idea of a perfect home will probably be different to yours. Research carried out by Domain suggests that renters in Australia (most of whom are aged 18-34) look for:

  • Convenient location (access to the city, shops, schools)
  • Good public transport
  • Off-street parking
  • Outdoor spaces

Consider these needs when looking for a property, as it might change what you’re looking for and therefore your budget. If you’ve been out of Australia for a while, do some research on the housing market to figure out your budget. Knowing how much you’re needing to borrow will make it a lot easier to shop around for a home loan.

What should you do?

If you’re feeling overwhelmed, you are not alone. Buying a home can be a long and stressful process, especially if you’re living overseas. Having a mortgage broker in Australia can make getting a mortgage much easier. Having someone in the country that knows the housing market and ins and outs of home loans will significantly lighten your load. Brokers don’t need to be in the same state as your property, so you have a range to pick from.

A home loan should not give you grey hairs. At no charge, we can help you through the approval process. We negotiate with the lenders for you and cut through the finance talk, so you can understand your options and rest more easily.

Right now, home loan interest rates are at a record low to support Australia’s economic recovery from the pandemic. Now is the perfect time to either buy a home or investment property, or refinance your existing loan. As experts in the home loan market, we can help you make the most of these savings with the best interest rate on the market.

Buying in Australia while living overseas is an option for most expats. If you need a hand, give us a call today.

Read more about refinancing your home loan here.

Disclaimer: The information provided is general in nature and does not constitute financial advice. Please speak to us for recommendations on your individual circumstance and requirements.