Can Permanent Residents Buy Property in Australia?



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As an Australian living abroad, you might be wondering how the home loan process differs from mortgage applications for those residing in Australia. An expat mortgage, in principle, is the same as that for an Australian citizen residing in Oz. However, there are some differences for those with permanent residence abroad.

Watch out for stamp duty, different loan type options and lending criteria. The situation might be even more different for Australians investing in property jointly with foreign nationals. Follow our guide to receive the best professional advice on seeking home loans and getting approval in Australia as a permanent resident abroad.

Can Overseas Permanent Residents Buy Australian Property

If you’re looking for a home loan in Australia as a permanent resident living overseas, this page is for you. At Odin Mortgage, we understand how challenging it can be to find the best home loan for your property investment when you’re not residing in Australia. 

This page provides professional guidance on the maximum borrowing limit, purchasing property with foreign income, stamp duty charges, and applying for mortgages as a permanent resident living abroad. You might not be aware of what loans you qualify for.

We can assist all Australian expats with their home loan options to get on the property ladder and what to watch out for with your mortgage application.

Permanent residents living overseas

A permanent resident living overseas is someone with Australian residency living abroad, either on a temporary visa or permanent resident visa, like in Hong Kong, Singapore, or the UAE.

Those whose primary residence is overseas might find it harder to obtain approval for their home loan than someone who is only a temporary resident abroad. This is usually because lenders require higher deposits and are more suspicious of currency values fluctuating.

Many banks and lenders won’t offer home loans to Australian citizens living overseas. Some require special terms for overseas Australians. However, at Odin Mortgage, we aim to find conventional mortgages for all Australian expats, whether they are temporary residents abroad or permanently living overseas on the same terms.

Legally, however, there are some stipulations for Australian expats to qualify for a purchase property in Australia. In recent years, particularly, the Australian regulators have tightened restrictions to limit foreign investments into residential property in Australia. Yet, it is not impossible. We are here to guide you through every step to purchase your property.

Permanent residents with foreign income

This is where many mortgage lenders will turn their backs on you as an Aussie expat applying for a home loan. Not all lenders will offer you a home loan if your main source of income is in a foreign currency.

If you have a permanent residency in Australia, lenders will consider 100% of your net income when considering approval for your home loan. However, if you live in another country, most lenders will be more scrupulous about your financial situation. 

Most banks will discount your income by 20% if you earn an acceptable foreign currency and will apply Australian taxes to your income irregardless of where you are residing, which will impact serviceability and borrowing capacity.

However, here at Odin Mortgage, we have lenders that would apply local effective tax rates to your foreign income, allowing you to maximise your borrowing.

Proving assets and foreign income

You may need to seek professional advice about how to provide proof of your work history and income. The lender may require you to present backdated payslips to prove your ability to repay the mortgage.

Furthermore, if you have a permanent resident spouse who is not from Australia, it might be more challenging if you put them down as a home buyer. However, if you need their income for borrowing power, you might be able to add them as a co-borrower rather than a buyer.

It is best to speak to a mortgage broker who specialises in expat mortgages to understand how to present your professional, financial and personal information to the bank.

Get a free Australian mortgage assessment today.

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

Maximum lending ratios for permanent residents

Before a lender decides to offer you a loan, they assess your ability to repay back the loan and interest rates. To work out if you qualify, lenders calculate something called the loan to value ratio (LVR). This calculation uses the value of the property and the deposit amount, or down payment, to judge your ability to repay the mortgage.

The loan to value ratio is calculated by dividing the borrowing amount by the property value. For instance, if the property value is $500,000 and you will need a loan of $350,000. The loan to value ratio is 70%.

For those with a permanent resident visa abroad, banks require a minimum deposit of 20%. Most banks have a maximum value ratio limit, sometimes as high as 90-95%. However, lenders then often require you to get Lenders Mortgage Insurance to protect the bank should you default on a payment.

You can use this calculation to work out how big a deposit you will need to save.

The bigger the deposit you can offer, the lower the value ratio will be, and therefore, the more willing lenders will be to offer you a home loan. The lender might reward you with lower interest rates and other benefits as it is less risky for them to borrow.

On the other hand, a high-value ratio suggests to the lender that you are a risk. You also will have to borrow more money to cover the property investment, leaving you vulnerable to rising interest rates. You might also be charged with mortgage insurance, which is a one-off lump sum additional charge.

Be careful of the stamp duty surcharge for foreign citizens!

Permanent residents living overseas should watch out for the foreign stamp duty surcharge. This surcharge is applicable to all Australian states, except the Northern Territory. The stamp duty regulations and requirements differ in each state. It is a good idea to talk to a professional about whether you are eligible to pay stamp duty.

Stamp duty typically ranges between 4-5% of the property’s value. If you purchase a resident home costing $1,000,000, you might find yourself paying between $40,000 – $50,000 in stamp duty. This hefty addition to the mortgage can be very challenging for foreign citizens, or Australian expats married to foreign citizens.

As mentioned earlier, be careful if your spouse is not an Australian citizen. Foreign home buyers are required to pay the stamp duty surcharge of 7-8% of the property’s value.. Even if you purchase the property together, you could be jointly hit with the surcharge. If you are solely relying on your income, you should be okay. 

However, if you need your spouse’s money to get a loan, speak to a professional about your circumstances.

Also, if you are newly residing in Australia, you may similarly be eligible to pay the stamp duty surcharge. If your permanent resident visa is new, double-check whether you meet requirements. For example, in some states, you might have to pay the surcharge if you have had your visa for less than 200 days.

At Odin Mortgage, we know how tricky it can be to work out the intricacies of stamp duty regulations, that’s why we’re here to help.

Get a free Australian mortgage assessment today.

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

How do interest rates differ for permanent residents overseas?

Don’t worry, Australians residing abroad are able to get the same interest rates on their FHA loans as anyone living in Australia. Over the last twenty years, market interest rates have fluctuated between 3-5% . Make sure to compare different mortgage permanent resident lenders to find the best home loans and interest rates.

Australian expats are also able to apply for interest-only, fixed-rate or variable-rate home loans. Interest-only loans offer the opportunity to only pay the interest at a fixed rate for an introductory period of time. After this period, usually no more than five years, the borrower then must repay the principal amount back with each monthly payment.

Fixed-rate home loans are a type of personal loan that offers a fixed interest rate for the first few years of the loan. Similarly, this introductory period can be up to five years maximum. The benefit of a fixed-term loan is that you repay a stable, regular amount each month. If you’re nervous about budgeting for your mortgage repayments this might be a good option.

However, the downside of fixed-term loans is that you might end up paying higher interest rates if the interest goes down. Although, you will similarly pay lower interest rates if the rate goes up.

A variable-rate mortgage is when you pay whatever interest the market interest rate is. This can fluctuate from month to month, sometimes higher than the starting rate, sometimes lower. Both fixed-rate loans and interest-only automatically become varying interest loans after the introductory period is up.

Apply for a mortgage

The process of applying for a mortgage is much the same if you reside in Australia as it is if you are a temporary resident overseas.

The good news is that you don’t need approval from the Foreign Investment Review Board FIRB to buy a house in Australia as an expat.

Typically, the bank will look at your valid identification, personal information, financial details, visa, credit history and credit score. As you are living abroad, lenders might conduct a more thorough search into your credit report before offering you a home loan.

Mortgage brokers and lenders might also request more information. There are many countries in the world, and not every bank in Australia can be an expert in how each of them operate. Therefore, the process to get your home loan approval might be more time consuming as an expat than for those living in Australia.

Lenders will then look at your LVR (loan to value ratio) to decide whether to offer you a home loan. You will also need to present your passport, proof of address, credit history, payslips and visa to get loan approval.

Related Resources

For all permanent visa holders in Australia and expats living abroad with a visa, Odin Mortgage is here to help you qualify for your mortgage.

We offer all the resources you need to get your home loan approval:

Whether you have found your ideal property or not, it is best to speak to lenders as soon as possible. Knowing how much money you can offer when looking to buy will be a great advantage on the property market. It will prove your reliability and seriousness about buying a home in Australia.

In addition, you will be better prepared to find the property you want within your budget, saving you time, stress and money.


Can an Australian permanent resident get a mortgage?

Yes. Any permanent resident of Australia can get a mortgage without seeking special permission. Similarly, expats living abroad with a temporary visa can purchase a property in Australia. There are some changes to the process, however.

New visa holders in Australia might run into surcharge costs if they are not careful.

Do you have to be a permanent resident to get a mortgage?

Australia has tight regulations on foreign investment. If you have a temporary visa, you might have to seek approval from the Foreign Investment Review Board FIRB to buy a house or land in Australia as a temporary resident. Temporary residents should seek advice before buying a home in Australia.

Permanent residents don’t need approval from the Foreign Investment Review Board.

What are the costs of buying a property?

On top of the cost of the mortgage itself, permanent and temporary residents face large extra fees in the home loan process. These include legal fees, loan establishment fees, stamp duty, FIRB approval fees (for foreigners and the temporary residents only), property inspection fees and buyer agents fees.

It is typically recommended that you allow an extra 5% of the house value to allow for extra expenses.

How much can I borrow as a permanent resident overseas?

Permanent residents living abroad can usually borrow as much as Australians living in Oz. However, you should bear in mind that for expats, the required deposit is usually 20%. Therefore, you can usually borrow up to 80% of the property’s value, but speak to your broker to understand these terms better. 

The country you reside in and its currency may affect the amount you can borrow.

Get a free Australian mortgage assessment today.

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