How to Get a Mortgage as an Expat in Australia
Moving to Australia as an expat offers exciting new opportunities, from pursuing a career to enjoying a high quality of life in one of the world’s most livable countries. However, one aspect of settling down that many new residents need to consider is home ownership. Buying a home in Australia as an expat may seem like a complex process, but with the right knowledge and preparation, it is achievable.
In this blog post, we’ll cover the requirements for getting a mortgage as an expat in Australia and provide insights on navigating the process. For those of you preparing for your move to Australia, we also recommend checking out our related post, “Immigration to Australia: 5 Smart Finance Tips to Be Prepared”, which offers additional financial advice to help you start your life in Australia with confidence.
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What Is Required to Get a Mortgage as an Expat in Australia?
Getting a mortgage as a non-resident or an expat in Australia can be more challenging than it is for Australian citizens, but it’s certainly possible. Lenders assess expats differently, often depending on factors such as visa type, income, and foreign tax residency status. Below are some key requirements you need to be aware of when applying for a home loan as an expat in Australia.
Visa Status and Residency
The type of visa you hold can significantly impact your eligibility for a mortgage in Australia. Typically, Australian lenders classify foreign candidates into two main categories: temporary residents and permanent residents.
- Permanent Residents: If you have Australia permanent residency, you are generally treated similarly to Australian citizens when applying for a mortgage. Most lenders will offer you the same interest rates and terms, as long as you meet other financial criteria.
- Temporary Residents: If you are living in Australia on a temporary visa, such as an Australia work visa, securing a mortgage can be more challenging. However, some lenders are willing to offer loans to temporary residents, especially if they hold certain types of visas like the 482 work visa or 457 visa. Additionally, the amount of the loan and interest rates may vary depending on your visa status.
Foreign Investment Review Board (FIRB) Approval
If you are not an Australian citizen or permanent resident, you will likely need approval from the Foreign Investment Review Board (FIRB) before purchasing property in Australia. FIRB approval ensures that foreign investment in Australian real estate is regulated and complies with government policies. It’s important to note that FIRB approval can take a few weeks, so factor this into your timeline when planning to purchase a property.
You can expect to pay a fee when submitting your request for FIRB approval, which varies depending on the value of the property. The review is generally straightforward, especially if you’re buying new property rather than an existing one, as the Australian government encourages foreign investment in newly built properties.
Deposit Requirements
When requesting a mortgage as an expat, the deposit required by lenders is often higher than for Australian citizens. While citizens may need to put down as little as 5-10% of the property value, expats are usually required to pay a larger deposit, typically ranging from 20-30%. This higher deposit serves as a way for lenders to mitigate risk.
The exact deposit amount will depend on your visa status, income level, and the lender’s policies. To better prepare, start saving early and plan for a substantial down payment if you’re serious about buying property in Australia as an expat.
Income and Employment Stability
Lenders in Australia place a significant emphasis on income stability when reviewing mortgage requests from expats. Having a stable job, preferably in Australia, is key to securing a mortgage. If you’re working for an Australian company and earning in Australian dollars, you’re more likely to be viewed favorably by lenders.
However, if your income is earned overseas, you may face additional challenges. Some lenders only accept income in specific currencies, and exchange rate fluctuations can complicate the process. Additionally, lenders may offer lower loan amounts to mitigate the risks associated with foreign currency fluctuations.
To increase your chances of securing a mortgage, ensure that you have a steady income, a good employment history and that your earnings meet the lender’s requirements. Be prepared to provide thorough documentation, including payslips and tax returns, to demonstrate your financial stability.
Credit History
Your credit history is another important factor that Australian lenders will evaluate when considering your mortgage request. If you have been living and working in Australia for some time, having a good credit score within the country can greatly enhance your chances of approval.
For expats who are relatively new to Australia or who still have credit histories in other countries, lenders may consider your international credit record. Be prepared to provide detailed information about your financial history, including records from your home country.
If you’re planning to move to Australia or have already relocated, start building a strong credit profile by managing your financial obligations carefully—this can include paying bills on time, avoiding excessive debt, and keeping your credit card balances low.
Mortgage Options for Expats
Several Australian banks and lenders offer specialized mortgage products for expats. Some of the major lenders include the big four banks—Commonwealth Bank, ANZ, Westpac, and NAB—as well as other institutions that cater specifically to foreign buyers. These lenders offer a variety of mortgage options, but it’s essential to do your research and compare terms, interest rates, and fees before committing to a lender.
Many expat-friendly lenders have teams or specialists who are familiar with the unique challenges foreign candidates face when applying for mortgages. If possible, try to connect with one of these professionals to help streamline the process.
Additionally, some lenders offer mortgage brokers who specialize in working with expats. A broker can guide you through the home loan process, providing personalized advice and helping you find the best mortgage deal to suit your specific circumstances.
Tips for Securing a Mortgage as an Expat in Australia
To increase your chances of securing a mortgage as an expat in Australia, keep the following tips in mind:
- Save for a Large Deposit: Since lenders often require higher deposits from expats, start saving early. A strong deposit not only increases your chances of approval but may also improve the terms of your mortgage.
- Research Visa-Specific Policies: Different lenders have different policies for various visa types. Ensure you understand how your visa status will affect your mortgage options.
- Build Your Credit History: If you’re new to Australia, work on building a strong credit score by managing your finances responsibly.
- Get FIRB Approval Early: If required, seek FIRB approval as soon as possible to avoid delays in the property purchasing process.
- Consult a Mortgage Broker: Consider working with a mortgage broker who specializes in helping expats. They can provide valuable insights into navigating the Australian home loan market.
Let UIS Australia Help You Move to Australia with Confidence
At UIS Australia, we understand that moving to Australia involves many important decisions, including securing your financial future. Whether you’re interested in obtaining an Australia work visa, pursuing Australia permanent residency, or simply looking for advice on how to live and work in Australia, we are here to help.
Our experienced team specializes in guiding candidates through the immigration process, making your move to Australia smoother and more efficient. From visa requests to navigating the requirements of expat life, we are committed to supporting you every step of the way.
Start your journey today. Contact UIS Australia to discuss your options and take the first step toward living in Australia.