Are you an Australian citizen living in Singapore? Are you planning to buy a property in Australia from Singapore? Odin Mortgage is the perfect expat mortgage broker you are looking for.
Australian home loans for expats in Singapore
If you are in Singapore, here is everything you need to know about Australian home loan Singapore for expats:
Variable, Fixed, or Interest-Only
As an Australian citizen living in Singapore, you have the option to apply for a variable-rate, fixed-rate, or interest-only home loan. If you’re a Singaporean, then here’s some good news for you too – Singaporeans can apply for most home loan products too.
However, foreign nationals might face higher interest rates.
Loan Size and Term
Australian citizens and permanent visa holders residing in Singapore may borrow up to 90% loan to value ratio (LVR). Although, this depends on credit score and income. If you cannot provide sufficient evidence of your Singaporean income, lenders may limit you to 80% LVR.
Home Loan Package: Offsets and Redraw
Whether you’re an Australian expat in Singapore or a Singaporean, you have the option to apply for offset features and redraw facilities on your home loan. In general, lenders only tend to offer a loan to strong borrowers. If your Singaporean income is not sufficient, the lender will reduce your borrowing power. To ensure you get the best of the loan features, it’s best to speak to a specialist Australian expat mortgage broker.
How Do Lenders View Singapore Dollars?
Whether you’re earning in Singapore dollars (SGD), Great British Pounds (GBP), Euros or United States dollars (USD), Australian lenders accept most widely used currencies. However, SGD is a safe bet for Australian lenders. Some lenders will consider your entire income for a property loan in Australia while some might not consider 100% of your income, especially if you cannot provide sufficient income proof.
Pros and Cons of home loans for Australian expats in Singapore
Take a look at the pros and cons of Australia property loan Singapore:
Some Australian lenders will use Singaporean tax rates on your income, as opposed to applying Aussie rates. This should help strengthen your borrowing power on your home loan. By using Singaporean tax rates, your net income may appear higher, which can make you eligible for a higher loan amount.
Some lenders may not offer competitive interest rates to Australian expats residing in Singapore without adequate evidence of their net income.
Singapore dollars are relatively well-known in Australia, therefore, some lenders will consider 100% of your income.
Self-employed borrowers living in Singapore may face restrictions on the loan amount, features, and interest rates, and may be required to provide several years' worth of tax returns to prove their income.
Australians in Singapore don't pay higher interest rates, as long as they can provide proof of income.
Difficulties may arise when dealing with lenders who cannot process foreign addresses or phone numbers, leading to significant delays. Speak to a specialist Australian expat mortgage broker in Singapore to find the right lender for you.
Key features of Australian Expat Home Loans
Here are the main property loan features overseas expats in Singapore can expect:
Most Aussie expats can get away with a deposit size as low as 5%. However, to avoid paying LMI, it’s best to save a deposit of around 20%. You’ll also need to save enough for additional bank fees and charges, such as a loan application fee.
As the Singapore dollar is a fairly reliable currency, many lenders will accept 100% of your net income. However, you may find some lenders only consider 80% of your income. Also, remember that Singapore has a private school system. Lenders will consider school fees as one of your expenses affecting your borrowing power.
Australian expats and Singapore residents can opt to repay their home loans monthly, weekly, or fortnightly. Additionally, expats can repay their home loans early without penalty.
Australian expats should expect the same mortgage interest rates overseas as offered to Australian citizens. Singapore residents might face higher interest rates if applying for a home loan with a specialist lender. Both expats and Singapore residents might have to pay extra fees for translations and other international costs.
Key Facts about Australian citizens in Singapore
How to Apply for an Australian Property Loan from Singapore.
When applying for an Australian expat mortgage as a Singaporean or an expat in Singapore, you’ll need to meet the lender’s eligibility criteria.
Eligibility criteria to apply for an Australian home loan from Singapore
To be eligible for a home loan in Singapore, you need to:
- Have a good credit score or history of making repayments on time.
- Be an Australian citizenship (if you’re an expat).
- Put down a 20 – 30% deposit if you’re a Singapore national.
- Be over 18 years of age.
- Some lenders might require a Power of Attorney.
Documents required to apply for Australian home loan from Singapore
To apply for an Australian home loan from Singapore, you need:
- Two forms of income verification, such as recent payslips, an employment letter, or tax returns.
- 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.
- Details of your prospective property purchase (if you’ve located a property)
As an expert mortgage broker for Australian citizens in Singapore, we understand that there are other considerations to take into account when buying property in Australia from Singapore. In this section, we’ll discuss some of the key factors that expats should be aware of before applying for a mortgage.
Double Taxation Agreement
Singapore and Australia have a Double Taxation Agreement. This means that if you’re a tax resident in both countries, you are eligible for a tax rebate to prevent paying two lots of tax on the same income.
Australian expats in Singapore don’t need to apply for FIRB approval when applying for expat mortgage Australia. Singaporean investors might do, though. Typically, foreign investors can only purchase new homes or vacant land.
Stamp Duty Surcharge
Australian citizens will only have to pay the normal stamp duty rate of between 4-5%. However, if you’re jointly purchasing with a Singaporean spouse, you will have to pay the stamp duty surcharge. You may also have to pay the foreign ownership land tax surcharge.
Power of Attorney
Some lenders require Australian expats to have a Power of Attorney in Australia to carry out legal actions on your behalf when applying for mortgage. This is an important consideration for expats who may not be able to travel to Australia to complete legal requirements. It’s important to check with your lender to understand their specific requirements.
We also provide expat mortgage services in the following countries
Frequently Asked Questions
Yes, Australian expats living in Singapore are eligible to obtain a home loan to purchase a property in Australia. The good news is that expats can enjoy the same interest rates, loan features, and terms for their mortgage as those living in Australia. This means that expats can access a variety of home loan options that cater to their needs, such as fixed or variable interest rates, flexible repayment options, and longer loan terms. So, if you’re an Australian expat in Singapore looking to buy property in Australia, getting a home loan is definitely an option to consider.
Under the tax treaty between Singapore and Australia, individuals earning investment income in both countries are typically only required to pay taxes once. As we are an expert expat mortgage broker, we recommend all our clients to still lodge a tax return in both countries, particularly if they have property investment income.
Fewer and fewer lenders offer home loans to Australians living overseas. You may need to speak to a specialist Australian mortgage broker in Singapore about your Australian lending options if you are an expat in Singapore. Here at Odin Mortgage, we are experts at finding mortgage solutions for expats. Get in touch today!
No, Australian expats in Singapore do not need to apply for the Foreign Investment Review Board (FIRB) approval. However, Singaporean investors need to do so. Typically, foreign investors can only purchase new homes or vacant land.
Many lenders will accept 100% of the net income in Singapore dollars (SGD). However, some lenders may only consider only 80% of the income.