Is a New Immigrant Mortgage the Only Way to Buy a House When I Move?
Did you know you can increase your salary by around 28% when moving to Australia from a country like the UK? With Aussie salaries paying better and the sun shining brighter for longer, no wonder many people make Australia their new home!
You need to apply for a visa before planning your migration to Oz, however. But what happens if you want to stay in Australia? Will you be able to buy a home in Australia as an immigrant?
Who Is an Immigrant in Australia?
An immigrant is an individual from overseas who wants to build a new life for themselves in Australia. You could be from any country, that does not matter.
You will need to be successfully granted a visa before you will be allowed to move to Australia to work. Eligible visas include:
- Temporary Skill Shortage visa (subclass 482)
- Temporary Graduate visa (subclass 485)
- Skilled Recognised Graduate visa (subclass 476)
- Skilled Regional (Provisional) visa (subclass 489)
- Business Innovation and Investment (Provisional) visa (subclass 188)
Many people move to Australia looking for new opportunities in an amazing climate. You may plan to move to Australia permanently, or for several years.
Get a free Australian mortgage assessment today.
Can Foreigners Get a Mortgage in Australia?
Yes, lenders are vying to give foreigners like you a mortgage in Australia! Although contrary to the laid-back lifestyle experienced in Oz, Aussie banks are strict!
You will need to submit a vast array of evidence when applying for a mortgage. In addition, you will need to be prepared to wait for the process to come to fruition.
To make your life easier, seek professional broker advice from Odin Mortgage. Our brokers are Expat experts who will find the best home loan for your status and personal circumstances.
Which Home Loans Are Available to Foreigners in Australia?
The home loan deals available for foreign citizens in Australia will depend on your visa type and status.
If you hold a temporary work visa, you may be able to apply for a non-resident home loan. To qualify, you must have at least one year left on your temporary visa and have a good, steady job.
Certain professions, such as the legal and medical professions, may be able to secure low-interest rate home loans. Furthermore, if you are a medical or legal professional, you may qualify for waived lenders’ mortgage insurance.
How Much Can I Borrow With a Temporary Work Visa?
You will be able to borrow 80% of the property purchase price when partnered with one of our specialist banks.
You could request to borrow a higher amount than 80%, although you will run the risk of paying lenders’ mortgage insurance. LMI is another cost for you to pay monthly, covering the interests of your lender in case you default on the loan terms.
Your home loan application to borrow 90% or 95% of the property purchase price will be strengthened if your partner is an Australian citizen or permanent resident.
Discover your estimated home loan repayments today and use Odin Mortgage’s repayment calculator! You can additionally add extra repayments to your calculation and assess how quickly your home loan will decrease when paying extra.
Will I Need FIRB Approval?
You will also need to apply to the Foreign Investment Review Board to seek permission to purchase a home in Australia. A fee will be payable to the FIRB worth several thousand dollars.
Additional costs include paying the foreign stamp duty surcharge. This surcharge is an additional transfer duty fee worth around 7% or 8% of the property purchase price, depending on your state. Remember that this surcharge is in addition to the standard stamp duty fees.
You could choose to buy a home in a state or territory that does not implement a foreign stamp duty surcharge. Current locations where this is applicable are Northern Territory and Tasmania.
Find out how much stamp duty and foreign stamp duty surcharge you will need to pay by location! Enter your details into the Odin Mortgage’s stamp duty calculator and discover how much money you will be liable for!
How Would Redundancy Impact My Property?
Are you unsure whether to purchase an Aussie property as a foreign citizen in case you lose your job and visa?
Redundancy is not the end of the world and you can seek another job and an employer who will act as your sponsor. Bridging visas exist for this purpose as a stop-gap between visa applications.
Your status will be flagged to the Department of Immigration and Citizenship, however, so you will need to actively improve your situation. After 28 days, you will be contacted regarding the cancellation of your visa, although you have a week to reply and explain your case.
If you are unable to gain further relevant employment, you will lose your visa and be asked to leave Australia. This will mean that your house may need to be sold. However, if the property was new when you bought it, you may be able to retain the house as an investment property.
Get a free Australian mortgage assessment today.
Can Foreigners Receive Government Buying Incentives?
No, incentives such as the First Home Owner Grant are only open to Australian citizens and permanent residents.
However, once you have secured permanent residency, you will be entitled to apply for all relevant incentives! Odin Mortgage will help you discover the incentives you can apply for!
Although, other incentives such as the Home Loan Deposit Guarantee is solely open to Australian citizens to apply for.
Will I Need to Pay Higher Interest Rates as a Foreign Citizen?
Most lenders will not charge a foreign citizen a higher interest rate. Providing you have a working visa, many lenders offer competitive rates, sometimes below the Bank Standard Variable rate.
How Can I Improve My Borrowing Power as a Foreign Citizen in Australia?
Improve your borrowing power by transferring your savings to Australia. Lenders are looking for home loan applicants that are low risk.
Income from overseas can be slightly volatile due to foreign exchange rates. Moving your savings to Australia and converting your currency to the Australian dollar reduces the workload for the lender.
The lender can assess in real terms the amount of money you have in Australia.
You can additionally increase your home loan application status by placing a larger deposit towards your home loan. The recommended deposit for a property purchase in Australia is 20% of the property purchase price.
Placing a deposit lower than 20% on a new property purchase may result in the lender requesting that you pay LMI.
Lenders’ mortgage insurance is an additional expense for you to pay monthly and is insurance for the lender’s interests. This is requested to safeguard the lender if you default on your home loan repayments.
LMI will need to be paid until the equity in your home reaches 20% of the property value. The equity of your home will increase when you pay principal repayments each month, along with possible property price increases.
Remember that money you pay on interest repayments does not decrease the amount of money you have borrowed from the lender.
What Are Principal and Interest Repayments?
Principal repayments are the amount of money you pay in instalments that reduce the amount of money borrowed from the lender. Every time a principal repayment is paid, the amount borrowed will decrease and the equity in your home will increase.
Interest repayments are money that goes straight to the lender and is their money to do as they wish. None of the money reduces the amount of money you have borrowed from the lender to buy the property.
You will always need to pay interest repayments on your home loan commitment.
You may decide to agree to an interest-only home loan deal where you do not pay any principal repayments at all. This keeps your monthly repayments low, although the amount of money you have borrowed never decreases.
Interest-only home loans are popular with investors and with homeowners who need a short-term financial solution.
Most people agree to pay both principal and interest repayments, however. This reduces the amount of money you have borrowed from the lender which enables your equity to rise.
How Can I Qualify For a Non-Resident Mortgage?
Visit Odin Mortgage and access free, high-quality broker advice and qualify for your non-resident mortgage today! Whilst every lender is slightly different, we know which lender is likely to approve your home loan.
Typically, the following areas will be assessed by the lender during your loan application:
- Credit history. Only your credit history in Australia will be assessed.
- Employment. What industry do you work in? Is your employment stable?
- Income. How much do you earn each month?
- Assets. Do you have any assets such as savings or a property?
- Liabilities. What debts do you owe?
- Visa. What type of visa do you hold and how long is left on your visa?
- Currencies. If you have money in savings which is a foreign currency, that may negatively impact how much you can borrow.
- Ability to pay. Will you be able to afford the repayments?
Will My Overseas Credit History Be Considered?
Lenders in Australia cannot gain access to your credit report from an overseas country. They can only access your credit history since you have moved to Australia.
Instead, further evidence of bank statements from overseas accounts may be requested. However, this varies from lender to lender.
Get a free Australian mortgage assessment today.
How Can I Improve My Credit Score?
Improve your credit score by never defaulting on any loans, and closing down any unused credit cards.
Every financial maneuvre you have made in Australia will be recorded by a credit reference bureau. Every credit card application, late repayments, and any loan rejections.
Usually, every 30 days a credit card company or another type of finance company will report your activity. There are three main credit reference agencies in Australia: Equifax, Experian, and Illion. Companies can choose to solely report to one credit reporting agency if they wish.
If you have defaulted on any payments, your credit score will be impacted negatively. However, any positive activity such as paying your bill on time may improve your credit score.
It is vital to remember that any credit limits you have will also work to decrease your credit score. Try and close down as many credit cards and other debt as soon as possible. This will help to improve your credit status and save you money on future interest!
What Is a Good Credit Score?
A good credit score in Australia is deemed to be around 661 and above. However, each of the three credit reference agencies in Australia uses a different scale, and so a ‘good’ score may differ.
In general, aim for your credit score to be as close to 700 as possible and aim to rise above this level. The higher your credit score, the better range of home loan deals we will be able to find you!
Low-interest rates and very favourable terms are within touching distance for you and your non-resident home loan at Odin Mortgage!
How Can I Improve My Borrowing Power?
Increase the amount of money a lender will borrow you by reducing your debts! Reducing the number of debts you are liable for will subsequently increase your borrowing power. Lenders will determine that your affordability is now higher as you have fewer debt repayments to pay.
You should also cancel any unused credit cards. Do you have a $5,000 credit card limit saved for a rainy day? When it comes to your borrowing power, that $5,000 credit limit is a debt against your name. Lenders do not distinguish between spent and unspent debt.
Cancel those credit cards immediately and see your borrowing power soar!
Additionally, aim to reduce your outgoings and expenses to free-up surplus cash at the end of the month. Lenders will determine how much of your earnings do not get spent on debts and expenses.
Cutting down your outgoing expenses is a certain method to improve your borrowing power!
Many factors are considered by a lender when assessing your borrowing power, including:
- Age. Lenders will assess how many working years you have remaining when determining the length of a home loan and therefore how much you can borrow.
- Income. The more you earn, the more you will be able to borrow!
- Expenses. The higher your expenses, the less you may be able to borrow!
- Dependents. Unfortunately, lenders judge each child to be an expense and may lower your borrowing power accordingly.
- Assets. A higher deposit or an existing property to secure your home loan onto will help your borrowing power.
- Liabilities. The greater your debts, the lower your borrowing power will be!
- Credit score. A great credit score will make your application look favourable.
Take advantage of Odin Mortgage’s borrowing power calculator today and find out how much money you could borrow! Simply input your details and within seconds you will discover how much you could borrow in your home loan purchase.
Get a free Australian mortgage assessment today.
What Home Loan Options Are Available if My Partner Is an Australian Citizen?
Further home loan options open up if your partner is an Australian citizen or permanent resident. You must either be married to your partner or prove that you have lived together for at least 2 years, however.
You will firstly avoid the need to apply to the FIRB or pay the foreign stamp duty surcharge. If your partner with Australian citizenship or permanent residency is the main earner, your borrowing power will increase.
Home loan options are judged on a case by case basis and a long-term relationship with children may ensure that your application is favoured.
Should I Buy Now as a Foreign Citizen, or Wait For Permanent Residency?
You can buy a home now as a foreign citizen when requesting expert broker advice from Odin Mortgage. We will find you the best lender with the greatest deals for foreign citizens purchasing a home in Australia.
However, if you are close to receiving permanent residency, you may benefit from waiting for your status to be updated.
Permanent residency eliminates your foreign status, so there is no need to apply to the Foreign Investment Review Board. This will save you a great deal of time and money!
You will save additional dollars by not paying the foreign stamp duty surcharge, which is only a requirement for foreigners buying in Australia.
A wider pool of lenders will be open to approving your home loan, too. This is due to stating your intention to remain in Australia now that you have permanent residency.
How Much Will It Cost to Gain FIRB Approval?
The fee to apply for approval to the Foreign Investment Review Board is over $5,000, providing the property is valued at under $1 million.
The FIRB almost doubles if your home purchase reaches the following boundary of between $1 million and $2 million, with higher fees beyond this.
Contact Odin Mortgage Today!
Odin Mortgage expert brokers specialise in Australian Expat home loans and non-resident immigrant home loans. We know how to ensure your application flows smoothly, attracting fantastic lenders and generating unbelievable deals!
Frequently Asked Questions
Will foreign income affect my immigrant home loan application in Australia?
Banks treat foreign income differently than earning from Australia in the Australian dollar.
Depending on the foreign currency in question, some lenders may only consider 60% of the total as relevant to your home loan application.
Odin Mortgage will negotiate with Australian lenders to ensure as high a percentage as possible is included in your application.
How can I buy property in Australia as an immigrant?
Visit Odin Mortgage and let your mortgage broker find the best deals for you! We will inform you about the necessary lending criteria and ensure to get your loan approved!
Our expert mortgage brokers will assess your borrowing power and your likely repayment schedule to assess affordability. We will then match your details with a range of lenders and home loans, and then negotiate the best deal!
What does a mortgage broker do?
At Odin Mortgage, we find you the best home loan finance! We are experts in non-resident home loans and the Australian Expat home loan. We know the Australian property market and the best way to secure a home loan from an Australian lender.
Our service to you is 100% free! We offer skilled and impartial service and receive a fee from the lender who successfully approves your home loan. Read our FAQs to discover more about the service we can offer you and exactly what a mortgage broker does!