Australian Mortgages in Bahrain

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Australian Mortgage in Bahrain

Bahrain

Are you an Australian expat living in Bahrain? We can help you secure a competitive home loan in Australia.

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Australian Home Loans for Expats in Bahrain

Here is everything you need to know about expats in Bahrain finding Australian home loans.

Variable, Fixed, or Interest-Only

Any Australians living in Bahrain can purchase property with a fixed, variable, or interest-only home loan. Moreover, you can also apply for guarantor loans to increase your borrowing power to 105%. 

Australian expats can enjoy the same home loan options as Aussies living in Oz. Speak to a mortgage broker to discuss your expat home loan options.

Loan Size and Term

There is no maximum home loan size for Aussie expats in Bahrain. Australians can typically borrow up to 90 - 95%, depending on the lender. To avoid paying LMI, it’s better to borrow around 80% or lower. 

The maximum loan term for any Australian or Bahraini is 30 years.

Home Loan Package: Offsets and Redraw

Australian expats and Bahrainis can negotiate additional home loan features, such as 100% offset accounts and redraw facilities. Ask your mortgage broker to help you negotiate.

How Do Lenders View Bahraini Dinar?

The dinar is a tier 2 currency, meaning that many Australian lenders are wary of your foreign income. Accordingly, they may only assess between 60 - 80% of your net income. 

This can significantly impact your borrowing capacity. You may need to speak to a specialist lender in order to get the best home loan deal.

Pros and Cons

Take a look at the pros and cons of home loans for expats in Bahrain.

Pros Cons
Bahrain has no income tax regulations, enabling Aussie expats to save bigger deposits.
Some Australian lenders might apply Aussie tax rates to your Bahraini income, reducing your borrowing power.
Most lenders are willing to offer home loans of up to 90 - 95% LVR to Australian expats living in Bahrain.
The Bahraini dinar is tier 2 currency which means Australian lenders might not consider your entire net income.
Self-employed Aussie expats in Bahrain can borrow up to 80% LVR.
Lack of tax returns may limit your ability to borrow as high as 90% LVR.
Self-employed expats in Bahrain might struggle to prove their foreign income, limiting their borrowing capacity.

Allow us to find you the perfect home loan.​

Apply online to get expert recommendations with real interest rates and repayments.

Mortgage Features

Here are the main mortgage features Bahrain can expect

Feature Details
Deposit Size
Australian expats should save a deposit of around 20%. Bahrainis might need a deposit of around 30%. While lenders will offer home loans of up to 90 - 95% LVR, borrowers will have to pay LMI.
Borrowing Power
If your lender applies Australian tax rates of up to 45%, this could significantly impact your borrowing power. As Bahrain has no tax rates, try to find a lender who uses Bahraini tax rates.
Repayment Options
Australians in Bahrain can choose to repay their mortgage on a plan that suits them. They can opt for weekly, monthly, or fortnightly repayments. Bahrainis can also enjoy flexible repayment plans with most lenders.
Interest Rates
Interest rates should be equally competitive for Aussie expats in Bahrain and citizens in Oz. If you face challenges getting a lower interest rate, consider how you might improve your borrowing power or save up a higher deposit.

Mortgage Features

Key Facts

More than half (52.6%) of the Bahraini population are foreign expats.

Bahrain doesn’t charge income tax on any residents or expats.

Australian expats in Bahrain can access fixed or variable-rate home loans.

The Bahraini dinar is a tier 2 currency, meaning that some lenders won’t consider your net foreign income.

Feature Details
Deposit Size
ANZ prefers a home loan deposit of 20% or more when applying for a home loan.
Offset Account
A transaction account linked to home or investment loans. This account can be used to offset the amount you owe on the loan, and ANZ will only charge the interest in the difference.
Repayment Options
Depending on your loan type, repayments can be made weekly, fortnightly or monthly via ANZ’ Internet Banking services.
Package Benefits
With ANZ packages, borrowers can access lower interest rates, free offset account, credit card and benefit from waived fees.
Interest Rates
With the Breakfree package, borrowers can access a discount up to 2.10%
Expat Information
ANZ can assist loan applications in a variety of foreign currencies.

How Do I Apply?

When applying for an Australian mortgage as a Bahraini or expat in Bahrain, you’ll need to meet the lender’s eligibility criteria.

Eligibility

Make sure you apply with a lender who specialises in home loans for Australians in Bahrain. 

  • A good credit score or history of making repayments on time.
  • Australian citizenship (if you’re an expat). 
  • 20 – 30% deposit if you’re a Bahraini national.
  • Over 18 years of age

Documents required

  • Two forms of income verification, such as recent payslips or an employment letter.
  • Form of identification, such as a passport, driver’s licence, or birth certificate.
  • Details of your expenses, such as other credit liabilities and living costs.

Other Considerations

Double Taxation Agreement

As Bahrain has 0% income taxation rates, there is no need for a tax treaty between them and Australia. They do, however, have a Tax Information Exchange Agreement, allowing the easy transfer of information around other taxes, such as social security.

FIRB Approval

Australians living abroad don’t need to apply to FIRB for approval to purchase property in Australia. Australians with a Bahraini spouse also should not face any restrictions. However, if you’re not an Australian or New Zealand citizen, then you will need to seek approval from FIRB.

Stamp Duty Surcharge

Only Bahrainis, other foreign nationals, or Australians married to a foreign national must pay the stamp duty surcharge. Australian citizens and expats do not need to pay.

Frequently Asked Questions

Australian expats living in Bahrain are eligible for the same home loan products as any Aussies living elsewhere. If you’re buying with a Bahraini spouse, you may unfairly be treated as a foreign buyer. Additionally, some lenders might require a Power of Attorney for overseas borrowers.

Lenders tend to judge foreign debs on a case by case basis. Some have a 30% buffer to allow for other credit repayments. However, some lenders might subtract your foreign debts from your income.

Expats in Bahrain will only have to pay Australian tax on Australian sourced income. However, if you plan to move back to Oz, you will become a tax resident and pay Australian tax on your worldwide income.