Can I Get a Home Loan In Australia While Living Overseas?

If you’re an Aussie living abroad, you might be wondering whether or not you can apply for a home loan while overseas. The good news is that even if you’re not in the country, you can still apply for an expat mortgage in Australia, but there are a few extra factors of which you should take note.  Read on to get the low down on expat home loans.

Buying properties in Australia from overseas

When it comes to granting Australian expat home loans, different lenders have varying policies regarding overseas applicants. Some lenders require you to have an Australian address or citizenship, whereas others take a more flexible approach. You might also need to hold an Australian bank account to pay for the loan repayments, while other lenders are happy to accept certain foreign currencies. 

Essentially, you should do your own research on different lenders and expat home loans to find one that works best for you.

How much can expats borrow?

As an expat, the amount you can borrow for a home loan often depends on a range of different factors, including your income, employment status, deposit size, credit history and the policies of the lender. Much like applying for a mortgage as an Australian resident. 

Like any borrower, you'll need to have a deposit saved up, typically around 20% of the property's purchase price. It’s worth checking if you need to have the funds ready to go in an Australian bank account or whether your lender will accept a currency that's easily convertible to Australian dollars. If you’re self-employed, your lender might require you to put down a larger deposit to secure a home loan. Chat with your bank to understand their requirements.

And don’t forget, you’ll also need to cover those other upfront costs that come with buying a home, so make sure you account for them in your calculations too.

Do lenders accept foreign currency?

If you’re living overseas and earning an income in a foreign currency, you might be wondering whether you can make your mortgage repayments in a foreign currency. While this typically depends on the lender’s policies, commonly accepted currencies include:

• US Dollar (USD),
• Euro (EUR),
• British Pound Sterling (GBP),
• Swiss Franc (CHF),
• Australian Dollar (AUD),
• Canadian Dollar (CAD),
• Japanese Yen (JPY),
• UAE Dirham (AED),
• Swiss Franc (CHF), and
• New Zealand Dollar (NZD).

While other currencies, like the Singapore Dollar (SGD), Hong Kong Dollar (HKD) and United Arab Emirates Dirham (AED) are also accepted, conditions often apply. 

Buying properties in Australia with a foreign spouse

If you’re an Aussie expat, buying an investment property in Australia with your foreign partner can add a some complexity to the home-buying process. You could be subject to a foreign buyer’s stamp duty surcharge that could add an extra fee on top of your existing stamp duty. 

The surcharge is applied as a percentage of the property's purchase price. The specific rate varies depending on the state or territory and can range from a few percentage points to significantly higher charges. 

In some cases, home buyers choose to purchase a property in the name of the Australian partner to avoid paying the extra surcharge.

Considerations before applying for an expat home loan

As an expat living overseas and applying for a home loan in Australia, there are several important factors to consider to navigate the loan application process successfully:

• Residency status: While you're an Australian citizen, your residency status may affect your eligibility for specific loans and the terms you're offered. Some lenders may require you to have an Australian address or residency status to qualify for specific loan products.

• Australian tax rates: Some lenders use Australian tax rates to assess your home loan application, rather than the tax rates of the country you’re living in. This can significantly impact your borrowing power, especially if you live in a country with low tax rates, like Singapore or the United Arab Emirates (UAE). 

• Power of attorney: Since you're overseas, you might need to appoint someone as your power of attorney to act on your behalf in Australia for the property purchase process. This person could handle paperwork, sign documents and represent you during the transaction.

• Interest rates: Some lenders charge higher interest rates to expats living abroad when buying an Australian property, whereas others offer more competitive rates. This is where it can come in handy to do your research to make sure you’re getting a good deal.

• Foreign currency risk: Fluctuations in currency exchange rates could affect your ability to make loan repayments if your income is in a different currency. A currency that’s weak against the Australian dollar can impact your borrowing power. Plus, lenders will often use their own exchange rates, which are often lower than market exchange rates.

• Tax implications: Buying property in Australia can have tax implications, particularly if you're living overseas. For example, if you’re earning rental income from an investment property, you’ll need to file Australian tax returns. Therefore, it can be a good idea to seek advice from tax professionals familiar with both Australian and international tax laws to help you understand any potential tax obligations.

• Legal considerations: Before taking out an expat home loan, it’s important to understand the legal aspects of buying property in Australia. From property laws and regulations to additional requirements for expat buyers, it’s worth consulting with a legal professional who specialises in Australian property law.

While buying properties in Australia from overseas is still possible, it can involve some extra considerations. It can be worth working with industry professionals who are experienced with managing expat home loans. 

‍

This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking independent taxation and financial advice before making any decision based on this information.‍

Tax law is complex and subject to change. For the latest information, check the ATO website or with your accountant or financial advisor.

Unloan is a division of Commonwealth Bank of Australia is also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.

Applications are subject to credit approval; satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000.

‍Unloan offers a 0.01% per annum discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.