10 Things to Know Before Buying a House in Australia

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Buying property has always been daunting. Buying property today in a strange and unpredictable economy is simply disheartening! 

As an Aussie Expat looking to buy a property back home Downunder, you may not know which direction to turn! Can Expats even buy a home in Australia?

Odin Mortgage can make your journey to buying a home in Australia much easier. Listening to what you want and need from your property purchase, and tailoring our service for you! 

Just having an expert to talk to and ask for guidance is such a benefit. We are Expat broker experts who can secure you your dream Aussie home loan today!

But, there are certain things to know before buying a house in Australia. Read on to discover our top ten list of what to check before buying your amazing Aussie property!

10 Things to Know Before Buying a House in Australia

1. Are You Ready To Buy a Property?

Buying your own home is a huge commitment! Once you have secured your home loan approval and reached sale completion, you are legally an owner of an impressive asset. You also owe your lender a massive amount of money!

Failing to make the agreed repayments will result in significant consequences. Not only will you lose your home, but your credit rating will also plummet. You may find it difficult to obtain a great home loan again.

Buying the best property for you is also a commitment you should think carefully about. Buying a property in a regrettable location may prove difficult to sell. 

Additionally, if your property requires a lot of unexpected renovations, costs could spiral to an unmanageable level!

However, buying a property also offers you security. When renting a home, your landlord can give you notice to leave at any time. Even if you have always paid your repayments on time, your landlord can do as he wishes.

Once you have bought your own home, no one can ask you to leave. As long as you default your repayment instalments, of course!

Make sure you are ready to buy your own house before taking the next step!

2. What Is Your Budget?

You need to arrive at a realistic budget and know how much you can afford to spend. Everyone would love to buy an 8-bedroom detached home with sprawling gardens near the coast, but most people can’t afford to!

Start by working out how much you can comfortably afford to pay each month in mortgage repayments. Consider how much you pay now for your rental property as a foundation figure. 

Try to keep repayments to a 30% threshold, totalling no more than 30% of your monthly income. So, if you receive $3,000 per month from your salary, try to limit your home loan repayments to $900 per month. 

However, you should try to make extra repayments when you are able to, reducing the loan term. This will also save you a substantial amount of interest! Test out some figures now using our mortgage repayment calculator for Australian homes.

You can also find out the maximum amount of money you are able to borrow, using our borrowing power calculator. Decide was size deposit you want to put down on your home loan and calculate the highest property price for you.

Using both tools, settle on a maximum property price that you can use during your property hunt!

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.
10 Things to Know Before Buying a House in Australia

3. What Suburb Will You Choose?

Location is vitally important when buying a property. Think about why you are buying the property. Do you intend to live in the house and raise a family? Or are you hoping to sell after a while and make a profit?

If you wish to settle in the suburb over the long term, do your research about the local area! What are the schools and facilities like locally? How far are you away from family and friends?

When making an investment, look for key areas of regeneration. Which suburbs consist of rising property values or infrastructure investment? What is the area’s public transport like, and what is the property’s ownership history?

Making a poor location choice will provide ramifications for the duration of your home ownership. If you are moving from overseas and hoping to relocate to Australia, seek professional advice and support from your mortgage broker.

Check out these top 10 locations to buy a home in Australia in 2022!

Top 10 Locations to Buy a Home

1. Campbell’s Creek, Victoria, 3451

2.  Corinda, Queensland, 4075

3.  Albion Park, New South Wales, 2527

4.  Lithgow, New South Wales, 2790

5.  Gagebrook, Tasmania, 7030

6.  Rylstone, New South Wales, 2849

7.  Tuncurry, New South Wales, 2428

8.  Smithfield, New South Wales, 2164

9.  Greenwith, South Australia, 5125

10.  Chidlow, Western Australia, 6556

10 Things to Know Before Buying a House in Australia

4. What Other Costs Are Involved In Buying a House?

So you have your deposit ready and know how much your repayments will cost per month. What additional costs do you have to consider?

Stamp Duty

A significant cost to remember when buying a home in Australia is stamp duty. Stamp duty is a tax that you must pay when you buy a property, although the amount you need to pay varies by state. 

The amount of stamp duty also varies according to the property value and whether you are a first home buyer or a foreign purchaser. Some states allow first-home buyers a discount whilst foreign buyers need to pay an additional surcharge.

For example, a first home buyer in New South Wales pays zero stamp duty on their $650,000. You must be an Australian citizen or permanent resident to enjoy this benefit, however.

What if you are not a first home buyer? Well, an Aussie citizen or permanent resident buying the same property in New South Wales must pay $24,850 stamp duty.

If you are a foreign buyer, a significant surcharge is added to this amount, totalling a staggering $76,850 payable in stamp duty. This includes the foreigner stamp duty charge on top of the standard stamp duty fee. These figures change drastically when buying in different states and territories, however.

How much is stamp duty in Australia for your property and location? Discover the exact amount of stamp duty you will need to pay using our stamp duty calculator!

Legal and Conveyancing Fees

Paying your solicitor to complete the necessary paperwork and conveyancing tasks is another cost to remember. You could pay up to $2,000 in fees, although this varies according to location and the service you use.

Building and Pest Inspection

A combined building and pest inspection will be required to check your potential property thoroughly. You could pay a few hundred dollars for this service, up to $1,000.

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

Lender’s Mortgage Insurance

If your deposit totals less than 20% of the property value, your lender may request that you pay Lender’s Mortgage Insurance. This is an insurance payment that protects your lender’s interests in case you default repayments. 

As an additional cost, most home buyers will try to avoid the dreaded LMI! As specialist mortgage brokers, we can hold negotiations with your lender and ask for LMI to be removed as a request.

FIRB Application Fee

If you are a foreign buyer in Australia, you must apply to the Foreign Investment Review Board and ask permission to buy a property. 

A foreign buyer is anyone who does not possess Aussie citizenship or permanent residency in Australia. The application fee is several thousand dollars and certainly adds to your costs!

Ongoing Costs

When crunching the numbers, remember ongoing costs such as home and contents insurance and council rates. Some areas charge higher costs for such services do research property prices and locations.

10 Things to Know Before Buying a House in Australia

5. Is It Better to Buy or Build an Aussie House?

Building your own home in Australia can be much cheaper, although this depends on your location. You will pay a significant premium if your location is particularly special!

Odin Mortgage can help you acquire a land and building package, taking into account the price of the land and the total cost of construction. You must have fully approved plans, however.

You will receive the finance for the land and the first stage of construction. At each construction stage, the next instalment of finance will be released to you. Your lender may ask for proof that the previous construction stage has been met successfully, however.

These are the five typical stages of construction whereby your lender will release an instalment of finance.

Stage 1

    Base

    Beginning of construction

Stage 2

    Frame 

    Wall frames and trusses

Stage 3

    Enclosed

    Bricks and roofing

Stage 4

    Fixing

    Fixtures and fittings

Stage 5

    Completion

    Final construction works

6. Can I Grab a Renovation Bargain?

Opting for a house in need of TLC can make a wise investment! Purchasing a property that is ready to move into will come with a higher price tag. You will also have greater competition which could drive the price up further.

A property that needs renovating will scare off many potential home buyers and so you could find a bargain! It is a good idea to take a tradesperson with you on a viewing to provide a rough estimate of how much the renovation may cost. 

You can then decide on a maximum offer whilst ensuring the purchase makes financial sense for you.

7. What Are the Differences Between Fixed and Variable Home Loans?

What type of home loan do you want to secure?

Fixed Interest Rate

A fixed home loan will offer you an interest rate fixed for several years. You will pay the same repayment every month for that set period, although you cannot switch deals or sell your home. 

An exit fee may be payable if you decide to sell or search for a different lender or deal.

Variable Interest Rate

A variable home loan may come with a lower interest rate, making your monthly repayments much cheaper! You will be free to sell your home or change deals without paying an exit fee.

However, the amount you pay per month may change and fluctuate, providing you with uncertainty. One influence is the rising RBA cash rate hike which may result in paying much more than you budgeted!

8. Do I Need a Broker?

Yes, you do need a mortgage broker, but what does a mortgage broker do? We find the perfect loan product for you, particularly if you are an Aussie Expat. Whether you are a citizen or permanent resident of Australia buying property Downunder, or a foreign buyer, we can help!

Odin Mortgage’s services are free to use, and you are under no obligation to continue your application. We retrieve our fee from the successful lender whilst providing an impartial service to you!

Without a mortgage broker, you may not realise the amazing home loan and refinance deals available. You could quickly agree to a home loan from a major lender, without considering smaller lenders and exclusive deals!

10 Things to Know Before Buying a House in Australia

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

9. How Long Will It Take to Buy a Property in Australia?

A typical time frame for buying a property Downunder is between 35 days and 90 days. This duration is much faster than in other countries globally, however. 

Aussie property purchases are must quicker if you provide your mortgage broker with plenty of supporting evidence straightaway. Many times, property purchases will take longer when a piece of supporting evidence is missing.

10. Am I Eligible For Any Incentives?

Unfortunately, foreign buyers are not able to attain any incentives when buying a property in Australia. However, if you are an Australian citizen or permanent resident, you may be eligible for incentives, despite working overseas.

Stamp Duty

First home buyers who hold citizenship or permanent residency in Australia may be eligible for stamp duty discounts. However, this varies from state to state.

First Home Owner Grant

Some states will offer you $10,000 as a grant towards your home purchase, although you must again be a first home buyer.

First Home Loan Deposit Scheme

Extended through 2022, Australian citizens can apply for the First Home Loan Deposit Scheme. Unfortunately, this scheme is not open to permanent residents.

Under the scheme, first-home buyers can buy a new property with only 5% deposit. You must meet these eligibility criteria:

  • Australian citizen
  • Aged 18 years old or over
  • First-home buyer
  • Earn under $125,000 per year as a single application
  • Earn under $200,000 per year as a joint application
  • Have 5% deposit ready
  • Property must be new
  • You must intend to live on the property

Under the Family Home Loan Deposit variety, you can buy a home with a 2% deposit. You must meet the following eligibility criteria:

  • Australian citizen
  • Aged 18 years old or over
  • You do not need to be a first home buyer
  • Earn under $125,000 per year (not including child maintenance payments)
  • Have at least one dependent
  • Have 2% deposit ready
  • Property can be new or existing
  • You must intend to live in the property

Contact Odin Mortgage Now!

Get in touch with Odin Mortgage today and seek professional advice from your Expat experts! You can complete the online form and request a call from our specialists, whatever your personal circumstances!

When buying a house, what to know and expect from your Aussie property purchase can be difficult to navigate. Odin Mortgage ensures you receive a simple process, straight through to your home loan approval!

Contact Odin Mortgage today and let us help you achieve your Aussie property purchase dream! We are an Australian financial services licensee so you can trust our advice!

10 Things to Know Before Buying a House in Australia

Frequently Asked Questions

What does a real estate agent do?

Real estate agents will help you search for the perfect property and secure the price you hope to pay.

Can I buy an investment property in Australia?

Yes, Odin Mortgage will help you secure finance to buy an investment property in Australia. 

You will not be eligible for any incentives, however, as you must live in the property to receive an incentive benefit. However, we can find you competitive investment mortgages that meet your needs precisely!

What services does Odin Mortgage offer?

Odin Mortgage is a team of expert brokers who specialise in Australian home loans for Expats. 

We can provide you with a fast loan pre-approval to place you in a strong property buying position!

We will find a relevant credit provider to meet your financial situation, searching for unique products such as low deposit home loans. Whatever your property buying needs, contact Odin Mortgage today!

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.
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