Are home loans available to Aussie expats?

Buying a house is a dream for many Aussies, no matter where they live or work. While people residing in Australia may find it easier to approach a local lender for a mortgage, those living abroad may need to contact lenders by phone or email to apply for home loans unless the lender has an office in their location. 

Also, irrespective of what currency they are paid in, expats would have to apply for a loan in Australian dollars, which requires factoring in ongoing exchange rates. As a result, lenders may require expats to put up a larger deposit and pay interest at higher rates. If you are buying property in Australia whilst living overseas, consider looking for a lender specialising in home loans for Aussie expats.

How much can an Aussie expat borrow through a home loan?

Whether you are an Australian citizen, a permanent resident, or an expat, the upper limit on the amount you can borrow will be based on your income, savings, and debts based on the Australian dollar equivalent, accounting for any fluctuations in currency exchange rates. 

Some lenders may only consider income earned in specific foreign currencies when assessing a home loan application. For example, a lender may accept the British pound, the Euro, or the US dollar, but not the UAE dirham, Saudi riyals, or Indian rupees. The tax you pay on your income could also make a difference, as lenders may consider your income taxed at Australian rates when estimating your borrowing power.

The loan-to-value ratio (LVR) offered by the lender may be smaller for expats than for people living in Australia, requiring the borrower to save a larger deposit. For instance, a Sydneysider may get approved for an 80 per cent LVR home loan, while a London-based Aussie citizen may only get a 60 per cent LVR loan for the same property. 

An expat's home loan application would undergo similar scrutiny to that of an Aussie resident, and you would still need to submit documents proving your income, your creditworthiness and your savings. Some lenders may require you to prove that you are authorised to work abroad and have the necessary visa or dual citizenship.  

How is an Australian’s expat home loan different from an Australian resident’s mortgage?

Apart from currency exchange rates and tax rates, lenders may also have different policies regarding the application process, how you earn your income, and who can be co-borrowers. As an expat, you may not be able to visit a bank location and sign the application in person, so consider checking with the lender about their signing and submission policies while discussing other loan terms. 

You should also find out how lenders assess your application if you are self-employed or if you earn your salary in more than one currency. On the other hand, you may find taking out a mortgage easier if you already own property in Australia and can leverage its equity.

If you are applying for the mortgage with a partner or a friend, their citizenship or visa status can also affect your application, especially if they are a foreign citizen without an Australian work visa. In Australia, the Foreign Investment Review Board (FIRB) sets out the property buying policies for people who are not Australian citizens or temporary residents, which can affect how lenders treat their income and estimate their borrowing power. Applications from such borrowers may also be vetted by the relevant government agencies before the lender can approve the loan.  

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