Australian Expat Mortgage UAE
- Australian Home Mortgages for Expats & Overseas Residents
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There are over 16,000 Aussie expats residing in the UAE, most of whom live in Abu Dhabi or Dubai. Let us help you get an Australian expat home loan from the UAE.
Key Points on Home Loans for Australians in the UAE
- Same Interest Rates as Local Borrowers: Australian expatriates in the UAE can access competitive interest rates on par with those offered to local residents, with no premium for overseas income.
- Up to 80% Loan-to-Value Ratio (LVR): Offshore borrowers can generally borrow up to 80% of the property value (a 20% deposit). Lender policy varies, and Lenders Mortgage Insurance is generally not available to non-residents.
- Income Discounting Due to Currency Risk: Foreign income, including UAE Dirham earnings, is typically discounted by around 20-40% to account for currency fluctuations, affecting overall borrowing capacity.
- Favourable Policies Due to UAE’s 0% Income Tax: The tax-free status in the UAE provides expats with greater borrowing power, as lenders calculate net income based on the full gross income, enhancing affordability and loan eligibility.
Australian Expat Mortgage in the UAE
If you are in UAE, here is everything you need to know about Australian mortgages for Aussie expats in the UAE buying property:
Australian Mortgage Options for Aussie Expats in the UAE
Australian expats in the UAE can apply for all types of home loans. Even though you’re a non-resident, some lenders can treat you just like a resident in Australia. Here are the most common home loans for expats in Dubai and other Emirates.
Variable Rate Home Loan
Pros
Interest rates on variable rate home loans are flexible, so if they drop, your monthly payments will be lower. This can be advantageous if you foresee interest rates decreasing.
Cons
While rates can decrease, they can also increase, potentially resulting in higher payments. If you’re unprepared for this possibility, it can create financial challenges.
Who Should Consider It?
This option is ideal if you’re optimistic about future interest rate declines and are willing to accept some risk.
Fixed Rate Home Loan
Pros
With a fixed rate mortgage, you’ll have a fixed interest rate for a specific period (typically 1-5 years), which will give you consistent monthly payments and budgeting stability.
Cons
You won’t benefit if interest rates fall below your fixed rate during that time. Breaking the fixed-rate term can also be costly.
Who Should Consider It?
This option is best if you value predictable payments and dislike unexpected changes in your budget.
Split Home Loan
Pros
With a split home loan, you can enjoy the stability of fixed payments on one part of your mortgage and the flexibility of variable rates on the rest by combining a fixed-rate and variable-rate loan.
Cons
If interest rates drop significantly, you may see less savings than a fully variable loan. Also, the fixed-rate portion often has a slightly higher interest rate, which could increase your borrowing costs.
Who Should Consider It?
This option is suitable if you want a balance between predictable budgeting and the opportunity to benefit from favourable market conditions.
Interest-Only Home Loan
Pros
With interest-only home loans, you have lower monthly payments initially because you only pay interest. This can help free up cash flow for other investments or expenses.
Cons
You’ll pay more interest overall due to the longer repayment period. Additionally, you won’t build equity in your property during the interest-only period, which can be risky if property values fall.
Who Should Consider It?
This option might be a good choice for short-term investment strategies or if you need to manage your cash flow for specific reasons. However, it’s crucial to have a plan to start paying down the principal in the future to avoid owing a large amount at the end of the loan term.
Pro Tip: Beyond interest rates, there are several crucial factors to consider when choosing a lender for expat home loans:
✓ Low interest rates and fees
✓ Ability to make additional repayments
✓ Online banking accessible from the UAE, ideally with an offset account
✓ Credit policies that accommodate Australian expats and non-residents
Loan Size & Term
Australian lenders offer the citizens and permanent visa holders in the UAE up to 90 – 95% of the property value. Emiratis might borrow up to 80%. Typically, all applicants can get home loan terms of 30 years maximum.
Loan Features
All Australian citizens and permanent visa holders can negotiate additional loan features, such as an offset or redraw facility. These can help you repay your loan more quickly and save money on interest repayments.
How Will the Bank Assess My UAE Income?
The Emirati Dirham is a tier 2 currency, meaning that most lenders will only look at 60 – 80% of your net income. Specialist lenders might look at slightly more, but expect your borrowing power to drop.
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Applying for Australian Mortgages from the UAE
When applying for an Australian mortgage as a UAE citizen or expat in UAE, you’ll need to meet the lender’s eligibility criteria.
Eligibility
Make sure you apply with a lender who specialises in non-resident home loans from the UAE. Here are the eligibility requirements:
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 UAE national.
Over 18 years of age.
Documents Required
To apply for an Australian home loan from UAE, you need:
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.
What If Your Financial Documents Are in Arabic?
If you’re an Australian expat in the UAE applying for a home loan and your financial documents are in Arabic, you’ll generally need to have them professionally translated into English.
Australian lenders require clear documentation in English to assess income, assets, and liabilities accurately. The translation should be done by a certified translator to ensure accuracy and meet lender requirements.
Consulting with your lender or mortgage broker beforehand can clarify specific translation standards they require.
Other Considerations
Double Taxation Agreement
The UAE doesn’t need a tax treaty with Australia as there is no income tax. However, Australian expats may still need to pay income tax in Australia. If you’re a tax resident, you’ll also need to pay tax in Australia on your UAE income.
FIRB Approval
Expats and permanent visa holders don’t need to consult FIRB before purchasing property in Australia. However, Emirates will need to seek approval.
Stamp Duty Surcharge
Australian expats in the UAE might face the foreign owners stamp duty surcharge if purchasing property with an Emirati spouse. Australian expats buying property by themselves won’t have to pay the surcharge, even if they reside in the UAE.
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Invest in Australia with confidence by partnering with Odin Mortgage. Our team will smooth out the home loan process, guiding you through the ever-evolving real estate landscape.
Key Features of Australian Home Loans for Expats in Dubai and Other Emirates
Here are the main mortgage features of an Australian Mortgage when applying from the UAE.
Deposit Size
Australian expats in the UAE should be able to borrow a loan with a minimum deposit of 5%. However, most lenders prefer higher deposits of nearer 20%. Plus, you may have to pay LMI if your LVR is too high. Depending on the lender, Emiratis may need a deposit of 20 – 30% to avoid LMI.
Borrowing Power
You might find your borrowing power significantly reduced. If the lender applies Australian tax rates to your UAE income, your borrowing power could drop by 30 – 40%. Fortunately, some lenders favour Australian expats in Dubai and other Emirate states because of the 0% UAE income tax rate, which increases your borrowing power.
Repayment Options
Australian citizens and permanent visa holders in the UAE can flexibly choose how they repay their mortgages. Depending on your lender, you can opt for weekly, fortnightly, or monthly repayments.
Interest Rates
Australian expats in the UAE should get competitive interest rates. Emiratis might get hit with higher interest rates to account for the higher risk of lending to a foreigner.
Pros and Cons of Home Loans for Australians in the UAE
Take a look at the pros and cons of Australian property loans for expats in the UAE.
Pros
- The UAE has 0% tax rates. Some Australian lenders apply UAE tax rates rather than Australian, greatly increasing your borrowing power.
- Some Australian lenders are willing to consider more than 80% of your UAE income.
- Self-employed Australian borrowers in the UAE can generally borrow up to 80% of the property value, subject to lender policy
Cons
- The UAE Dirham is a tier 2 currency, meaning that Australian lenders may only assess 60 – 80% of your net income, reducing your borrowing power.
- Some lenders might unfairly treat dual citizenship holders as foreign lenders and apply higher interest rates.
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We also provide expat mortgage services in the following countries:
FAQs about Home Loans in the UAE for Expats
Can I get a mortgage in Australia if I live overseas?
Yes, you can get a mortgage in Australia while living overseas, such as in Dubai or any other Emirate in the UAE. However, it often comes with additional requirements.
Lenders typically require a larger deposit (usually around 20-30%) and proof of stable foreign income. Interest rates and terms may vary, and some banks might be more restrictive than others.
Working with a mortgage broker familiar with expat and foreign income lending can make the process smoother and help identify lenders open to overseas borrowers.
Can foreigners get a mortgage in the UAE?
Yes, foreigners can get a mortgage in the UAE. Many banks offer home loans to non-residents, though the terms and requirements can be stricter than for residents.
Foreign buyers usually need a larger down payment (typically 20-25%) and must provide proof of stable income and a good credit history. Interest rates and maximum loan amounts may vary by lender.
Please note that we can’t help with this. However, if you want to get a mortgage in Australia as a foreigner from the UAE, our team is at your service.
Are Australian expats buying property in Australia eligible for a home loan?
Can I get mortgage to buy property in Dubai?
Yes, you can get a mortgage to buy property in Dubai, even as a foreigner. Banks in Dubai offer mortgages to residents and non-residents alike, though non-residents often face higher down payment requirements (typically 20-25%) and must meet income and credit criteria.
If you want to invest in Australian real estate instead, Odin Mortgage is here for you.
What property can foreigners buy in Australia?
Do Australian banks lend to non-residents?
Yes, Australian banks do lend to non-residents, but the lending criteria are generally more stringent. Non-residents typically need a larger deposit (often 20-30%), may face higher interest rates, and must meet specific income and visa requirements.
Each bank has its own policies on lending to foreign buyers, so it’s beneficial to work with a mortgage broker experienced with non-resident lending, such as Odin Mortgage, to navigate the requirements and identify suitable lenders.
How much can I borrow for a home loan in Australia as an expat?
Aussie expats need a 20% deposit, evidence of their UAE income and identity, and a good credit score.
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