Australian Mortgages in Saudi Arabia

Australian Mortgage in Saudi Arabia

Saudi Arabia

Expats living in Saudi Arabia can enjoy the same home loan options as Australians back home. What opportunities are there for Aussie expats?

Australian Home Loans for Expats in Saudi Arabia

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

Variable, Fixed, or Interest-Only

Australian expats living in Saudi Arabia are eligible for  variable-rate, fixed-rate, or interest-only home loans. 

Fixed-rate home loans allow you to budget your repayments while variable-rate loans might result in lower interest payments. Interest-only home loans enable Aussie expats to lower their monthly repayments in the early years.

Loan Size and Term

All Australians, whether you’re an expat, citizen, or permanent visa holder, should be able to apply for a LVR of up to 95%, depending on the lender and your borrowing power. Some professions or guarantor loans can get you up to 105% of the property value. 

Expats in Saudi Arabia can also apply for a maximum home loan of 30 years.

Home Loan Package: Offsets and Redraw

Offset accounts and redraw facilities are available for expats and Saudi Arabians. You might need a stronger borrowing capacity to apply for these additional features.

How Do Lenders View Saudi Riyal?

Saudi Riyal is a tier 2 currency. This means that Australian lenders might only consider between 60 - 80% of your net earnings in Saudi Arabia. You can improve your borrowing power by ensuring you have a good credit score and providing sufficient financial documents to prove your income.

 

Pros and Cons

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

Pros Cons
Saudi Arabia doesn’t impose income tax on individuals, so you have a better chance of saving up a significant deposit to improve your borrowing power.
Australian lenders might impose Australian tax rates on your Saudi income. However, a few specialist lenders might use Saudi tax rates, 0%.
Saudi Arabians can borrow up to 60% or 70% of the property price, if they meet other lending criteria.
Saudi Arabia and Australia do not have a double tax agreement. Therefore, if you become an Australian tax resident while earning in Saudi, you may have to pay tax on your foreign income.
Australian expats in Saudi Arabia have the same interest rates as those in Oz.
Self-employed Aussie expats in Saudi Arabia may struggle to supply sufficient evidence of their income without regular tax returns.
Self-employed Aussie expats in Saudi Arabia can apply for a loan of up to 80% of the purchase price, depending on their documentation.

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Mortgage Features

Here are the main mortgage features expats in Saudi Arabia can expect

Feature Details
Deposit Size
Expats in Saudi Arabia typically need a deposit of around 20%. However, Australians can borrow up to 95% of the property price with some lenders if they’re willing to pay Lenders Mortgage Insurance. Saudi Arabians might need a deposit of around 30%.
Borrowing Power
If your Australian lender uses Saudi tax rates, you could greatly improve your borrowing power. However, if they apply Australian tax rates, the amount you can borrow may take a hit.
Repayment Options
Australian expats and Saudi Arabians can choose a repayment plan to suit their foreign lifestyle. You can opt for weekly, fortnightly, or monthly repayments with most lenders.
Interest Rates
Interest rates are the same for Australian expats in Saudi Arabia as in Australia. However, Saudi Arabians might face higher interest rates if applying for an Australian mortgage.

Key Facts

There are about 5,000 Australian expats living in Saudi Arabia.

Saudi Arabian financial documents in Arabic will need a translator with a licensed certificate to translate them into English.

Without a tax return to supply, expats in Saudi Arabia can provide two recent payslips and a letter of employment to prove their 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 Saudi Arabian or expat in Saudi Arabia, you’ll need to meet the lender’s eligibility criteria.

Eligibility

Make sure you apply with a lender who specialises in Saudi Arabian home loans. 

  • 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 Saudi 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

Saudi Arabia does not have a Double Tax Agreement with Australia. Most expats can enjoy a tax-free life. However, if you’re buying property in Australia, you may have to begin paying Australian taxes. Moreover, if you become an Australian tax resident, you’ll have to pay tax on your Saudi income.

FIRB Approval

Expats and permanent visa holders do not need to apply for FIRB approval, even if you are married to a Saudi. However, Saudis purchasing property individually will face restrictions and need FIRB approval.

Stamp Duty Surcharge

Australian expats only have to pay the normal stamp duty rate between 4 – 5%. However, Aussies purchasing property with a Saudi spouse might have to pay the foreign surcharge of 7 – 8%.

Frequently Asked Questions

Australian citizens and permanent visa holders can apply for Aussie home loans from overseas. Expats in Saudi Arabia can expect up to 90 – 95% LVR, competitive interest rates and a range of additional loan features.

Australian expats in Saudi Arabia can apply for up to 90 – 95% LVR, with no limit on loan size. However, try to apply for an 80% LVR home loan to avoid paying Lenders Mortgage Insurance.

Saudi Arabia has a 0% tax rate, making it an attractive prospect for Aussie expats. However, some lenders might apply Australian tax rates (which reach as high as 45%) to your Saudi income, reducing your borrowing power.