Can you get a home loan on a visa?

It is possible to get a home loan in Australia if you’re on a visa, though the process could be more complex than for Australian citizens and permanent residents. Understanding some of the requirements for a mortgage with a visa could help you to compare your options and make a decision that suits your needs.

What obstacles could visa-holders face when applying for home loans?

When you apply for a home loan, you’re agreeing to repay the money you’re borrowing over an agreed term, often between 20 and 30 years. If it’s not certain whether you’ll be residing in Australia for the long term, a lender may be less likely to approve your mortgage application, as there’s a higher risk that you may not be able to reliably make your loan repayments.

Some lenders may only accept mortgage applications from borrowers on certain types of visas, such as bridging visas or 457 visas for temporary residents. Because there are a wide variety of different visa types, it’s often best to check with individual lenders whether yours is likely to be accepted.

As a visa holder you may not be eligible for all of the support services available to permanent residents and citizens, such as first home owner grants.

Even if you receive income from investments or other overseas sources, not all lenders will accept these sources of income as part of a mortgage application, or may require you to provide extra paperwork.

Buying property in Australia while on a visa may also require dealing with the Foreign Investment Review Board (FIRB). This government-affiliated body reviews applications from foreign persons (including temporary residents and foreign non-residents) to purchase assets in Australia, including real estate, to make sure these investments are not contrary to the national interest. To buy an Australian property while on a visa, you’ll need to apply for FIRB approval via the Australian Taxation Office (ATO), which may require paying a fee. Additionally, you may need to pay a foreign stamp duty surcharge. 

How can a visa-holder improve their home loan application’s chance of approval?

Even if you have a high income and low expenses, to be considered an “ideal” borrower, lenders generally look for those whose employment and residence has been stable for 12 months or more. You may have an easier time applying for a mortgage on a visa if you have payslips available to show you’ve been consistently earning income, and you can also show that you’ve lived at the same address for a year or longer.

Saving up a larger deposit of 20 per cent or more of the property value could make it easier to qualify for some home loans as a visa holder. Keep in mind that most lenders will want at least part of your deposit to be made up of “genuine savings” (money earned from your full-time job) – keep this in mind if you’re planning to supplement your deposit with overseas income or gifts.

Your credit score tells lenders how risky it may be to lend you money. If you don’t yet have an Australian credit score, the lender may not be able to accurately assess your mortgage application. Applying for an Australian credit card or even a phone plan that you can comfortably afford could be enough to let you start building your credit score. You can also check your credit score to get an idea of how a lender may see you before you apply.

Depending on your situation, you may be able to hold off on applying for a home loan until you’re able to go from a temporary visa to permanent residency status. This could help to remove some of the obstacles keeping you from buying property in Australia, though this may not be the best choice for everyone.

If possible, you could apply for a joint mortgage alongside an Australian citizen or permanent resident. As well as helping to negate some of the lender’s potential risk, this could potentially exempt you from requiring FIRB approval and paying a foreign stamp duty surcharge.

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