Purchasing property back home in Australia is a goal for many Aussie expats living in the United Kingdom. However, obtaining financing from overseas can present challenges, with Australian lenders having strict requirements regarding income and employment that must be met by expat borrowers.
This FAQ guide covers some of the most frequently asked questions by Aussies in the UK seeking finance for an Australian property purchase, to help you understand the key considerations around securing a Australian home loan from the UK.
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FAQs about Australian Home Loans for Aussie Expats in the UK
As an Australian citizen living in London, you can qualify for an Australian home loan to purchase property, provided you meet income, credit, and other eligibility criteria, however more documentation is required to verify foreign income sources.
When applying for an Australian home loan from London, you’ll need to provide documents such as income statements, identification, living expense details, the property purchase contract if you’ve found one, and potentially an Australian Power of Attorney authorization for legal matters.
If you have dual Australian-UK citizenship, you can qualify for a home loan, however some lenders treat dual citizens as foreign borrowers which can limit your options, so find a lender that fully recognizes your Australian citizenship.
Australian expats in London can access variable, fixed and interest-only home loans, with Australian citizens able to access better rates, while UK citizens may face higher interest rates from Australian lenders.
While a 20% deposit is recommended, Australian expats may qualify for loans with a 5-10% deposit from London, whereas UK citizens are typically required to have a 20% minimum deposit as foreign buyers.
As an Australian expat you can access standard Australian home loan interest rates, however additional fees may apply for foreign income verification, while UK citizens generally pay higher mortgage rates.
Many Australian lenders will use 100% of an expat’s foreign income when calculating borrowing capacity, however some apply an 80% discount to UK earnings when assessing an expat’s loan serviceability.
Lenders take into account all living expenses including bills, debts, school fees, plus costs associated with buying and holding an investment property, when determining an expat borrower’s affordability.
No, UK citizens are treated more conservatively in terms of borrowing capacity compared to Australians, however strong UK earnings can still provide good borrowing power.
UK citizens wishing to purchase property in Australia must obtain FIRB approval, have a 20% deposit, strong credit history, proof of income, meet age requirements, and satisfy other eligibility criteria as foreign property investors.
A favorable GBP exchange rate can positively influence affordability assessments for Australians buying property from London, however the impact varies between different lenders.