There are over 16,000 Aussie expats residing in the UAE, most of whom live in Abu Dhabi or Dubai. Let us help you get an Australian home loan from the UAE.
Here is everything you need to know about expats in the UAE finding Australian home loans.
Variable, Fixed, or Interest-Only
Australian expats in the UAE can apply for all types of home loans. Fixed rate loans can last for up to 15 years before reverting to a variable-interest loan. Interest rates are competitive with those offered to Australians back home.
Moreover, Australians in the UAE can apply for interest-only loans to reduce their monthly repayments in the early years. Emiratis can also apply for different loan types but might need a stronger borrowing power.
Loan Size and Term
Australian lenders offer the citizens and permanent visa holders in the UAE up to 90 - 95% of the property value. Emiratis might borrow up to 80%. Typically, all applicants can get home loan terms of 30 years maximum.
Home Loan Package: Offsets and Redraw
All Australian citizens and permanent visa holders can negotiate additional loan features, such as an offset or redraw facility. These can help you repay your loan more quickly and save money on interest repayments.
How Do Lenders View UAE Dirham?
United Arab Emirate dirham is a tier 2 currency, meaning that most lenders will only look at 60 - 80% of your net income. Specialist lenders might look at slightly more, but expect your borrowing power to drop.
Pros and Cons
Take a look at the pros and cons of home loans for expats in the UAE.
The UAE has 0% tax rates. Some Australian lenders apply UAE tax rates rather than Australian, greatly increasing your borrowing power.
The UAE dirham is a tier 2 currency, meaning that Australian lenders may only assess 60 - 80% of your net income, reducing your borrowing power.
Some Australian lenders are willing to consider more than 80% of your UAE income.
Some lenders might unfairly treat dual citizenship holders as foreign lenders and apply higher interest rates.
Self-employed Australian borrowers in the UAE might be able to borrow up to 90% LVR home loans with some lenders.
Here are the main mortgage features the UAE can expect.
Australian expats in the UAE should be able to borrow a loan with a minimum deposit of 5%. However, most lenders prefer higher deposits of nearer 20%. Plus, you may have to pay LMI if your LVR is too high. Depending on the lender, Emiratis may need a deposit of 20 - 30% to avoid LMI.
You might find your borrowing power significantly reduced. If the lender applies Australian tax rates to your UAE income, your borrowing power could drop by 30 - 40%. Fortunately, some lenders apply UAE tax rates (0%) which won’t affect your borrowing power.
Australian citizens and permanent visa holders in the UAE can flexibly choose how they repay their mortgages. Depending on your lender, you can opt for weekly, fortnightly, or monthly repayments.
Australian expats in the UAE should get competitive interest rates. Emiratis might get hit with higher interest rates to account for the higher risk of lending to a foreigner.
ANZ prefers a home loan deposit of 20% or more when applying for a home loan.
A transaction account linked to home or investment loans. This account can be used to offset the amount you owe on the loan, and ANZ will only charge the interest in the difference.
Depending on your loan type, repayments can be made weekly, fortnightly or monthly via ANZ’ Internet Banking services.
With ANZ packages, borrowers can access lower interest rates, free offset account, credit card and benefit from waived fees.
With the Breakfree package, borrowers can access a discount up to 2.10%
ANZ can assist loan applications in a variety of foreign currencies.
How Do I Apply?
When applying for an Australian mortgage as a UAE citizen or expat in UAE, you’ll need to meet the lender’s eligibility criteria.
Make sure you apply with a lender who specialises in UAE home loans.
- A good credit score or history of making repayments on time.
- Australian citizenship (if you’re an expat).
- 20 – 30% deposit if you’re a UAE national.
- Over 18 years of age.
- Two forms of income verification, such as recent payslips or an employment letter.
- Form of identification, such as a passport, driver’s licence, or birth certificate.
- Details of your expenses, such as other credit liabilities and living costs.
Double Taxation Agreement
The UAE doesn’t need a tax treaty with Australia as there is no income tax. However, Australian expats may still need to pay income tax in Australia. If you’re a tax resident, you’ll also need to pay tax in Australia on your UAE income.
Expats and permanent visa holders don’t need to consult FIRB before purchasing property in Australia. However, Emirates will need to seek approval.
Stamp Duty Surcharge
Australian expats in the UAE might face the foreign owners stamp duty surcharge if purchasing property with an Emirati spouse. Australian expats buying property by themselves won’t have to pay the surcharge, even if they reside in the UAE.
Frequently Asked Questions
Australian expats in the UAE can apply for the same home loan types as anyone in Australia. From fixed-loans to interest-only, Aussie expats should enjoy the same mortgage options as anyone else.
Emiratis can purchase new properties or vacant land in Australia, after seeking approval from FIRB. Aussie expats won’t face any restrictions, even if married to an Emirati.
Aussie expats need a 20% deposit, evidence of their UAE income and identity, and a good credit score.