Will Australian Lenders Accept My Foreign Currency?
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Applying for an Australian expat home loan and need to know if lenders will accept your foreign currency? There is really great news and some slightly less great news. But mostly, it’s good.
The really great news is that making an application for an Australian expat home loan isn’t the impossible task it might seem at first. It’s also the case that finding out the answer to the question “will Australian lenders accept my foreign currency?” is easier than you might think.
The content below will outline everything you need to know on Australian lenders and foreign currency. It will also go through the less ideal news which might not necessarily be so bad!
Will Australian lenders accept my foreign currency?
First off, YES, Australian lenders will accept your foreign currency. Even though many lenders prefer to accept applicants who earn domestic income, you can definitely be approved for a mortgage from an Australian lender. That’s some more good news.
But the less ideal news is that other lenders might stipulate that your foreign currency must match their list of acceptable foreign currency. For instance, some lenders will accept particular foreign currencies, such as US Dollars, Euro, Hong Kong Dollar, Great Britain Pounds Sterling, Canadian Dollars or Swiss Francs.
Each applicant for an Australian expat home loan will be evaluated on their own case.
If I live overseas as an Australian expat, can I refinance an Australian home loan?
Refinancing an Australian home loan is also possible even as an Australian expat. If you are living abroad or are employed abroad, it’s possible to consolidate debts or refinance property you already have with an Australian lender. So, in relation to the question “will Australian lenders accept my foreign currency for refinancing home loans?” this is also possible.
Get a free Australian mortgage assessment today.
How do exchange rate fluctuations affect loan approvals?
When applying to get an Australian expat home loan approved, large exchange rate variations are also something to watch out for when applying.
A lender can reduce your borrowing power based on the foreign exchange rate, and the lender will use their particular rate to calculate this, which will be outlined in the documentation signed by your Power of Attorney.
Here’s a quick example of how getting a loan approved can be affected by exchange rate fluctuations.
- Your Australian expat home loan is $450,000 US
- The property value is $750,000 AUD on the Australian property market
- The exchange rate is 1:1and LVR is 60%
- The Australian dollar changes and drops (it’s now only able to be exchanged for 80 US cents)
- Your loan value is now $562,500 US and the property is still worth $750,000 AUD
- The LVR has changed to 75% and is not an ideal percentage for the lender
Is it compulsory to be a permanent resident to get a mortgage in Australia?
No, you do not have to be a permanent resident in Australia to get a mortgage in Australia. Expat mortgages are available and there are many lenders who accept applications from Australian citizens who are living abroad.
So, if you are wondering the answer to the question “will Australian lenders accept my foreign currency if I am abroad?” the answer is yes, you can live or work abroad, and you don’t have to be a permanent resident in Australia to get a mortgage.
For Australian Expats what is the highest LVR?
The highest LVR that Australian expats are eligible for is up to 95% with LMI. This means that if you are an Australian expat looking to get loan approval, you can borrow a maximum of 95%, but this includes LMI—or lender’s mortgage insurance.
In the event that you choose not to pay lender’s mortgage insurance, the highest LVR you can get as an Australian expat is 80%. Typically, in terms of the purchase price or valuation the majority of lenders lend a minimum of 60% and a maximum of 80% LVR. Whether the purchase price or valuation is used will depend on the value that is lower.
Get a free Australian mortgage assessment today.
Can my foreign national partner and I get approved for a mortgage?
In relation to the question “will Australian lenders accept my foreign currency?” you might also wonder whether they will accept the income of your foreign national partner. Generally speaking, there are normally no problems if you (the Australian citizen) have the greater income sum.
The problem arises in cases where you are not stably employed or are unemployed and your foreign national partner has the majority income sum. Cases like these are classed as foreigner lending and can come with interest rates that are not as competitive as an expat home loan or expat mortgage.
When applying for an Australian expat home loan, you should therefore keep in mind that if you are in a de facto relationship with someone who isn’t an Australian citizen, you might not have the borrowing power you expect, as some other lenders might not accept the foreign partner’s salary.
Since the assessment of your financial position can be affected by your partner’s income, your application can potentially be declined if they think you’re a high risk. However, it’s also the case that other lenders will assess both of your incomes by using the nationality of the highest income earner.
Under which circumstances will Australian lenders accept my foreign currency from my partner?
If you are in a de facto relationship or are married to a foreign national, there are certain circumstances that Australian lenders will accept your partner’s foreign currency:
- If you have children with your partner
- If the majority of the income is gained by yourself
- If they have an Australian visa
- If they have family or relatives in Australia
Will Australian lenders accept my foreign currency if my income is in two currencies?
Since each lender will have their own preferred currency list, as well as a secondary list of currencies for foreign currency, whether your dual currency income is accepted will depend on whether the currencies match those on these lists.
Will I get the same currency exchange rate for both currencies?
The short answer is, no, you will not get the same currency exchange rate for both currencies. A specific currency exchange rate will be applied to the different currencies that you earn. One thing to keep in mind is that this can impact your borrowing power, which can be affected by the currency exchange rate, but it may still be possible to get home loan approval in Australia.
Will Australian lenders accept my foreign currency and will I be approved? Learn more at Odin Mortgage
So, you’re now aware of the answer to “will Australian lenders accept my foreign currency” How do you find out whether Australian lenders will approve your loan? The best way to do this is to do your research and then make an application, shrewdly.
Since applications for home loans can affect your credit rating, it’s wise to make applications carefully. That’s why research is critical.
Odin Mortgage’s resources, calculators and blog posts contain a vast amount of information on expat home loans. Make comparisons and calculations on interest rates, get the facts on refinancing or mortgage rates, or get in touch with us for more information.
Get a free Australian mortgage assessment today.
Will Australian Lenders Accept My Foreign Currency Frequently Asked Questions
Will my lender apply a foreign tax rate when I apply with foreign currency?
Although there are some banks that apply an Australian tax rate, whether your lender will apply a foreign or Australian tax rate will depend on the lender. Some will apply a foreign tax rate; other lenders will apply an Australian tax rate, and it depends on the rules established by the lenders. For example, foreign tax rates are sometimes reserved for borrowers whose payslips display withheld tax.
Which is better: A foreign tax rate or an Australian tax rate?
Normally, a foreign tax rate is better for an Australian expat when compared with an Australian tax rate (which is one of the highest rates in the world). The ideal thing about a foreign tax rate is that it gives you greater borrowing power, and this means you can borrow higher sums with a foreign tax rate.
Can lenders assess foreign debts when accepting my foreign currency?
Again, whether your lender assesses foreign debts will depend on the lender. Some will not assess them, particularly if your loan repayments are covered by rent income. Other lenders include a 30% buffer in order to accommodate interest rates.
Does other foreign currency income other than a salary count towards expat home loan approval?
The short answer is that YES, other foreign currency income other than a salary counts towards home loan approval. Normally, this will typically depend on whether the foreign income you make from investments, stocks, shares, bonuses etc. are frequent and likely to continue. For this reason, the lender will request foreign tax returns for this purpose, going back two years.
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