Can Expats Get a Mortgage in Australia? A Comprehensive Guide



Living abroad as an Australian expat and wondering the answer to the question “Can expats get a mortgage in Australia?” We recognise that it can be a challenge to navigate your way through terms like “expat mortgage broker”, “foreign income”, “borrowing power” and “expat lending” to find out the answer to this question…

And this is normally just the beginning, as you’ll need to sort through mortgage documents, go through pre approval, sort out legal fees… and you might even want to know if more than one currency is accepted by lenders.

If you’ve been hunting high and low for a definitive answer to the question “Can expats get a mortgage in Australia”, and have been Googling “expat mortgage Australia” without success, don’t stress! This ultimate guide will cover everything on Australian expat mortgages.

Can Expats Get a Mortgage in Australia? A Comprehensive Guide

Can expats get a mortgage in Australia?

The simple answer, and the answer that you’ve been looking for is that, yes, expats can get a mortgage in Australia! Australian expat mortgages and Australian expat home loans are available from particular lenders, which you can find with Odin Mortgage. Even though some major lenders don’t accept Australian expats, you can certainly get a mortgage from the right lender if you are an Australian expat.

Can expats get a mortgage in Australia: What sort of borrowing power do I have?

What might also be music to your ears is that your potential borrowing power is even similar to Australian citizens who reside in Australia. To explain this in plain English, the amount you can borrow is referred to as borrowing power and it’s a similar amount to Aussie residents.

If you’re looking to invest in an investment property you have many options to choose from in terms of Australian home loans, and it doesn’t have to be a challenge to invest in a property in Australia from abroad.

Get a free Australian mortgage assessment today.

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What amount can I borrow as an expat looking for a mortgage in Australia?

Now that we’ve established the answer to the question “can expats get a mortgage in Australia?”, we know you will be keen to understand your borrowing power. 

Borrowing power is determined by your income less expenses. There are also other factors such as what country you live in, what currency you are paid in, whether you are self-employed or PAYG, and many others.

To learn more about how much you can borrow as an expat visit this article.

Which factors can affect how much I can borrow from an Australian lender?

There are a few critical factors that can affect how much you can borrow, including foreign debts, foreign taxation rates and your actual income, which lenders will assess—along with the mortgage documents you provide.

What’s also considered important are foreign loans. If you have several foreign loans, the repayments you make might also be used to calculate your borrowing power.

Which mortgage documents are required?

In terms of the question “can expats get a mortgage in Australia”, to be approved for an Australian mortgage, providing loan documents such as foreign tax returns and bank statements detailing your financial position, are important for the mortgage process or loan application.

Will payslips and foreign tax returns be acceptable to an Australian lender?

If the payslips and foreign tax returns you submit are in English, you should have no trouble getting them assessed as they can demonstrate how much you are earning and count as income evidence. 

Some lenders might have departments specifically for non-resident expat applications who can interpret many languages. Translation doesn’t have to be an issue in this case.

How many bank statements will be required when applying for an expat mortgage?

It’s generally the case that you will need bank statements going back three months as evidence of your salary being paid into a foreign bank account.

Can Expats Get a Mortgage in Australia? A Comprehensive Guide

Which steps are involved during the mortgage process?

Most lenders will follow a particular mortgage process with a few critical steps, including an initial mortgage meeting, a credit assessment, recommendations for certain products, the submission of a mortgage application, a pre-approval phase, a phase involving property location and a formal approval stage and settlement. Let’s look at all of these phases in turn.

What happens in an initial mortgage meeting?

Typically, expats looking to get a mortgage in Australia will reach out to a mortgage broker or lender via a video call to discuss their long and short term goals. You will be asked a few questions about yourself, such as the currency you earn in, how you earn your income, whether you have children, and whether you already have a mortgage overseas.

What is a credit assessment for expat mortgages?

A credit assessment will then be carried out by a lender— a process that involves looking at the numbers and information you have provided them with, and assessing your information to determine your options as for an expat mortgage. Your lender might suggest that you need to take action to enhance your credit assessment, such as paying off credit card debt abroad.

In other scenarios, if you are prepared, your lender will ask you if you want to look at expat mortgage products right away.

Get a free Australian mortgage assessment today.

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

Which product recommendations might I receive for an expat mortgage?

In relation to the question “can expats get a mortgage in Australia?” there are a few product recommendations that you might receive for an expat mortgage, including offset accounts, redraw accounts or facilities, interest only home loans principal and interest payment expat mortgages, fixed rate loans and variable rate loans.

What is meant by an offset account and how does it work for expat mortgages?

As an Aussie expat, your lender might discuss an offset account with you, giving you the opportunity to set up a bank account and even withdraw and deposit cash into it while offsetting the loan amount with savings contained in the offset account. This means that if you have a home loan of $775,000 and you have $75,000 in an offset account, you pay interest on $700,000.

How does a redraw account work and how does it work for expat mortgages?

You might discuss a redraw account with your lender for an expat mortgage, and it works like this: You might have a loan for $800,000 with repayments over 30 years and you must make repayments of $4,000 each month. In the event you’ve been paying $5,000 per month as you’ve been saving a lot of cash, you can establish a redraw service, use this as credit and access the additional payments you have contributed to the loan.

What is an interest only versus a principal and interest expat mortgage?

They might move on to discuss products such as interest only and principal and interest payment mortgages, where an interest only expat mortgage enables you to pay the loan’s interest each month as opposed to the borrowed amount until you reach the term’s end, and a principal and interest mortgage enables you to pay the principal balance (the borrowed amount) and the interest.

So, when thinking about the question “can expats get a mortgage in Australia?” you can choose between interest only mortgages and principal and interest mortgages.

What is a fixed rate home loan versus a variable rate expat home loan?

What’s also possible is to choose between fixed rate loans and variable rate loans, where fixed rate home loans require you to pay interest at a rate that is fixed for a portion of the loan term, and a variable rate home loan requires you to pay interest at a rate that is not fixed.

Now, in terms of fixed rate home loans and variable rate home loans, it’s also possible to combine these two options as an expat. The combination is known as a split rate loan, where you might have a portion of your loan with a fixed rate of interest and the other portion with a variable rate of interest.

What do mortgage brokers do during the mortgage submission phase?

If you’re discussing products with a mortgage broker, they will narrow down your options in line with the many lenders they can offer you. This is a critical phase in response to the question “can expats get a mortgage in Australia?”. For instance, an Australian expat might be interested in an offset account, which not all lenders will provide. The mortgage broker will then remove the lenders who don’t provide offset accounts to expats from their list.

What is the pre approval phase during a mortgage application process?

Say you’re an Australian expat searching for an investment property worth $1,000,000, the pre-approval phase involves extending an 80% finance, which might be valid for a few months. In the pre approval phase, you can dedicate your time to searching for a suitable property.

Why should you get pre-approved before the property location phase?

It’s important to go through the pre approval phase before you start locating a property because you end up in a situation where you search the Australian property market, find a suitable property, but can’t get the Australian property of your dreams as a lender won’t offer you the required home loan for the property value.

What does the formal approval stage of mortgage application involve?

The formal approval stage of a mortgage application involves having a dialogue with your Power of Attorney, your lawyer or your conveyancer and arranging a settlement over 45 days to ensure your lender can prepare the loan documents. Arranging sufficient time is critical as you’ll need to get the signature of the loan documents witnessed by an Australian consulate, if you do not have a Power of Attorney, and send them back.

Can Expats Get a Mortgage in Australia? A Comprehensive Guide

What is a POA or Power of Attorney and why do I need one as an expat?

A POA is an authorisation for a trusted person to manage, handle and sign loan documents on your behalf. You might need one as an expat because, in answer to the question “can expats get a mortgage in Australia?” this is much easier with a Power of Attorney, and some lenders might require you to have one.

A POA may be necessary if you’re staying in a country where there isn’t an Australian Consulate/embassy or if circumstance prevents you from getting certain documents signed and witnessed.

With specific lenders, a POA may be necessary, and we would let you know in advance if that is the case.

Aside from that, the majority of Australian expats do not need a POA, and we will assist you with the signing process.

Get a free Australian mortgage assessment today.

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

Which factors and lending criteria will affect my chances of getting approved?

Several factors and lending criteria will affect your chances of loan approval in Australia as an Australian expat or Australian living abroad. From foreign currency to country, de facto relationships and your deposit, let’s look at these three factors.

Why is currency and country important for Australian banks and expat mortgage approval?

To start with, both foreign currency and countries are important factors. Most Australian banks will have their list of currencies and countries that they will accept from an expat’s mortgage application. Each lender will have a gold tier and a silver tier foreign currency list that can affect loan approval. Continue reading for more facts on gold and silver tier lists.

How does being in a de facto relationship affect the expat mortgage process?

What’s more, in terms of the mortgage process, although you might think that you will increase your chances of being approved with a double income and being married or in a de facto relationship, expat lending can still be declined if you have only been in a de facto relationship for less than two years.

In other situations, if your partner is an Australian permanent resident or an Australian citizen, this can help your application and lenders may accept your partner’s income.

If you are a couple considering Australian expat home loans from several lenders, and your spouse is a foreign citizen, approval from the Foreign Investment Review Board is not normally required for purchasing a property in Australia.

How does the deposit I can afford affect mortgage approval?

Some Australian banks will expect you to offer them a 30% deposit of the price of the property. A few will accept a 20% deposit, but not many banks will consider less than this because it will require lenders mortgage insurance (and this is not normally possible for Aussie expats). It depends on your financial situation and the lender you choose.

All of these factors can impact the answer to the question “Can expats get a mortgage in Australia?”

Which other factors will lenders assess (and which won’t they assess) for home loan financing?

During the assessment phase, lenders will assess certain income, including PAYG, rental income and self employed income. Under certain circumstances, commissions and bonuses might be considered as well, but this depends on certain factors. Here’s more information on these.

Can Expats Get a Mortgage in Australia A Comprehensive Guide

Will my commissioned income or bonuses be assessed by a lender?

Say you receive a commission income or salary that corresponds to particular services or products that you sell as opposed to an hourly wage, it can be seen as a slight grey area for lenders for assessment. In this sense, because your actual income might not be considered industry standard, in terms of commission this can affect the question “can expats get a mortgage in Australia?”

The unfortunate news is that, because some lenders will not accept commissioned income, even if you’re highly paid overseas, this can make it a challenge to get a mortgage amount you were hoping for in Australia as an expat. It all depends on how long you have been receiving a bonus or commissioned income overseas.

Your lender will therefore consider whether the commissions you earn correlate with industry standards, and the length of time that you have been earning them.

Get a free Australian mortgage assessment today.

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

Which income types can be considered by lenders when they assess home loan financing?

In Australia, lenders will consider certain income types such as rental income, PAYG or pay as you go and self employed income. We have already mentioned self employed income, which is normally acceptable to lenders if you can supply them with an accountant letter and proof of your financial income with statements. Let’s now focus on PAYG and rental income.

Under which circumstances is rental income acceptable to lenders for expat mortgages?

Rental income, or the income gained from your investment property in Australia or overseas is normally accepted, but only a particular percentage of the income can be considered. This can largely come down to the location of your property. Most lenders potentially accept up to 80% of rental income when assessing home loan financing options.

Which percentage of PAYG income will be considered by lenders for expat mortgages?

If you’re wondering “can expats get a mortgage in Australia with PAYG income?”, a lender will typically consider between 80% and 100% of PAYG income if you earn your income in a tier 1 currency. On the other hand, a lender will typically consider 60% to 80% of PAYG income if you earn in a tier 2 currency.

What conditions do Australian lenders offer for expat mortgages?

There are a few conditions that Australian lenders offer for expat mortgages, including a 30-year loan term and a choice between variable and fixed rate mortgages.

Another condition is that if you’re an Australian expat living overseas, you will not get any penalties for this. The interest rate that you are expected to pay will be equal to Australian citizens living in Australia.

You can reap the benefits of an interest only loan if your goal is to keep repayments low each month, and maximise your liquidity or cash resources.

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.
Can Expats Get a Mortgage in Australia? A Comprehensive Guide

Which processes do Australian lenders use to assess foreign income?

The short answer is that Australian lenders will assess foreign income from a rather negative perspective and will consider which tier your currency comes under.

What is a tier 1 and tier 2 foreign currency for expat mortgages?

A tier 1 currency is a currency that permits your lender to take on upwards of 80% of your income. A tier 2 currency is a currency that permits your lender to take on between 60% and 80% of your income. So, when thinking about the question “can expats get a mortgage in Australia?”,  and when contemplating your borrowing power, the currency tier of your income is vital.

Some examples of tier two currencies include the United Arab Emirates Dirham and the South African Rand, whereas tier one currencies include Great Britain Pounds Sterling and the United States Dollar, but let’s look at a more exhaustive list to go into more detail.

What are some examples of tier 1 currencies for expat mortgages?

Some other examples of tier 1 currencies for expat mortgages include:

  • Euros
  • Hong Kong Dollars
  • Japanese Yen
  • New Zealand Dollars
  • Singapore Dollars
  • Chinese Renminbi

What are some examples of tier 2 currencies for expat mortgages?

Some other examples of tier 2 currencies for expat mortgages include:

  • South Korean Won
  • Thai Baht
  • Malaysian Ringgit
  • Philippine Peso
  • Indonesian Rupiah
  • Arabian Riyal
  • Qatari Riyal
  • Vietnamese Dong
  • Kuwaiti Dinar
Can Expats Get a Mortgage in Australia A Comprehensive Guide

Will all my gross income be considered for an expat mortgage?

To put this into perspective, an Australian citizen who lives in Australia would have the luxury of having all of their gross income (100% of it) accounted for when the bank assesses their borrowing power. Now, most Australian expatriates don’t have this luxury. 

Instead, approximately 80% of the gross income you earn is considered and accepted, and this might not even be the worst-case scenario—it can be as low as 50%.

All of this is determined by risks related to currency fluctuation in relation to the Australian Dollar. If you are offered a lower percentage in terms of your Australian expat home loan, this is because your currency is viewed as an unstable currency in comparison to the Australian Dollar.

How do Australian tax rates versus foreign tax rates affect home loan financing?

Unfortunately, home loan financing as an Australian expat can be affected by whether your lender uses Australian tax rates or foreign tax rates (that correspond to the tax rates of your country of residence). So as an Aussie expat, it’s important to pay attention to the difference between these tax rates.

If a lender assesses your income with Australian tax rates when establishing your home loan, there’s a chance that you may need to accept a reduction in your borrowing power. 

The main reason that Australian tax rates might not be as favourable for home loan financing is that they might be higher than the foreign tax rates that apply to your country of residence.

Which other factors should I consider when considering the question of can expats get a mortgage in Australia?

Some of the other factors you should think about when considering the question “can expats get a mortgage in Australia?” are the deposit and LVR, the property purchasing fees and whether you must pay land tax and the stamp duty surcharge. Here’s more on each of these.

Can Expats Get a Mortgage in Australia A Comprehensive Guide

What is meant by LVR and what is the maximum for an Australian expat?

LVR refers to the loan to ratio value—and it’s not too technical to understand. Lenders will calculate this value by running the following calculation: the loan amount / (divided by) the property value. In basic terms, LVR represents how much you require in terms of the percentage of the property value, and the maximum LVR is approximately 80%. 

So, in relation to the question “can expats get a mortgage in Australia?”, the LVR is a critical part of the mortgage process when you make your application.

What deposit amount is required for Aussie expats looking for a home loan in Australia?

What’s more, if you’re an Australian expat looking to buy an investment property in Australia, a 10% deposit is normally expected from major lenders, but you will also need additional funds to go towards property purchasing costs.

Which property purchasing costs should I be aware of?

Don’t forget that there are some property purchasing costs that you must account for. Some of the property purchasing costs you should watch out for include legal fees, lenders mortgage insurance and the costs of setting up the mortgage.

What is the land tax and stamp duty surcharge and do I have to pay this?

Here’s some good news. While land tax might apply to a foreigner living in Australia or a visa holder, Australians living overseas will not have to pay land tax or the stamp duty surcharge unless you’re seeking to get a mortgage with a wife or husband who is not an Australian citizen.

You may find that you can avoid stamp duty if the loan title is in the name of the Australian expat, however.

Can expats get a mortgage in Australia with the support of a guarantor?

To answer this question, yes, it is possible for expats to get a mortgage in Australia with the support of a guarantor provided the guarantor lives in Australia.

What a guarantor arrangement entails is using the equity in an expat’s parent’s property and using it as security or secured charge for the purchase deposit. In this sense, as an expat you would service the loan of 80% in addition to the 20% loan using foreign income, and your parents will provide equity to secure part of your expat mortgage.

In this sense, there are a few advantages of a guarantor home loan. Your lender will view you as less of a risk and you can get the funding you require even in the event you don’t have the 20% deposit saved already.

Who should I choose as my guarantor when applying for an expat mortgage in Australia?

Since major lenders request that you choose an immediate family member to be your guarantor, you might think this is your only option. However, some lenders will permit you to choose grandparents, and other relatives to be a guarantor for your home loan application. 

There are particular eligibility requirements when you choose a guarantor. The main eligibility requirements include that your guarantor has:

  • An income that is stable
  • Property equity that can be put forward as collateral
  • Credit scores and a credit file that are good
Can Expats Get a Mortgage in Australia A Comprehensive Guide

Get a free Australian mortgage assessment today.

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

What can I do to find the right expat mortgage in Australia?

By soliciting the services of a good mortgage broker, you can find the right expat mortgage in Australia. Since there are variations between each lender i.e., some lenders will offer you an 80% LVR and others will offer you a 70% LVR, it’s definitely important to get the assistance of a mortgage broker, who will match you to the ideal lender and provide you with recommendations.

Can expats get a mortgage in Australia? Yes! Go with Odin Mortgage!

So, we’re finished with the article. Expats can get a mortgage in Australia and there are many lenders and mortgage providers to choose from.

At Odin Mortgage, we make the process of applying for a mortgage in Australia as an expat living abroad effortless. If you are searching for a perfect mortgage application with plenty of support and advice on the entire process, choose Odin Mortgage today.

We hope this article has given you all the information you’ve been looking for on the question “Can expats get a mortgage in Australia?” Get extra tips, hints and advice on expat mortgages, calculating an interest rate, negative gearing, borrowing power, and purchasing a home in Australia on our website.

Can Expats Get a Mortgage in Australia A Comprehensive Guide

Can Expats Get A Mortgage in Australia FAQs

What does lender policy mean in terms of expat mortgages?

Lender policies refer to the policies established by lenders and how expat borrowers are treated by lenders. In some circumstances, a lender policy can change significantly, so much so that they don’t accept foreign currency as part of their policy. It helps to recognise that lender policies can change frequently and that normally, small changes are made, but from time to time, significant changes can be made.

Can expats get a mortgage in Australia as a non-resident?

Yes this is possible; you can get a mortgage in Australia as a non-resident. Although major lenders will prefer to lend to Australian citizens or an Australian permanent resident, there are mortgages available for non-residents. You might face a higher interest rate for mortgages as a non resident but they tend to be competitive.

There are some strict requirements when compared with Australian citizens or those Aussies living in Australia as permanent residents. For example, you might be expected to come up with a bigger deposit for your home loan compared with Australian permanent residents. You might be asked to prove that you have previously had an income from Australia.

Does pre approval for an expat mortgage mean that I will definitely be approved?

Unfortunately, you are not guaranteed a home loan or expat mortgage just because a lender has pre approved you. You can still be denied or declined for an expat mortgage even after the pre-approval stage. As an expat, you must go through the formal application stage after pre approval to get the ball rolling in terms of formal approval.

For pre-approval, you can expect to receive this for three months provided you meet the lender’s guidelines and lending policies. This is normally sufficient time to find the ideal property, but you can ask your lender to extend the pre approval period, for which they will request additional updated documents for your expat mortgage.

Which factors might make it difficult for me to be approved for an expat mortgage?

A few factors can prevent you from being approved for an expat home loan, including debt that you haven’t paid, the type of foreign income that you earn, the fact that your actual income (including commissions) is not considered, or that your spouse’s income is not accepted because they are a foreign citizen. These can make it difficult to be approved for a particular expat home loan that would be ideal for your particular circumstances.

Other factors that can make it challenging to be approved for an expat mortgage is a high loan to value ratio, changes in employment statuses, a history of failing to make payments for other mortgages and an appraisal that is lower than expected (since your lender will not offer you a higher amount than the property value).

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