Are You an Australian Expat Looking to Purchase Your Dream Home or Investment?
Navigating the Australian property market as an expatriate can feel overwhelming, especially when lender policies differ so significantly. From acceptable currencies to documentation requirements, securing a mortgage as an expat requires careful planning and expert guidance.
With my extensive experience helping expats secure property in Australia, and my background in global capital markets at investment banks, I understand the challenges faced by Australians abroad. Here’s a guide to help you successfully navigate the process.
Key Policy Considerations for Australian Expat Buyers
1. Acceptable Currencies
Most lenders accept income in most major currencies like USD, GBP, EUR, AUD, SGD, and CAD. However, for less common currencies (e.g., INR, IDR, or CNY), policies vary, and approval is not guaranteed. If you’re earning in an uncommon currency, it’s vital to work with a broker who knows which lenders will consider your application.
2. Shading of Non-AUD Income
Lenders often "shade" foreign income to account for exchange rate volatility. This shading typically ranges from 70% to 100%, depending on the currency and lender policies. For example:
Major currencies like USD, GBP, and EUR are more likely to be assessed at 90–100% of income.
Income from less stable currencies may only be assessed at 70%.
Understanding how your income will be treated is crucial to maximising your borrowing power.
3. Self-Employed Overseas Income
If you’re self-employed overseas, getting a home loan can be more challenging. Many lenders won’t accept non-PAYG (salaried) income from overseas. However, some will consider it with comprehensive documentation, such as two years of foreign tax returns. Speak to a broker to identify lenders that support self-employed expats.
4. Higher Interest Rates and Fees for Expats
Some lenders apply higher interest rates or additional fees to expat borrowers. These rates and fees vary significantly across lenders, making it essential to compare offers. A good broker can help you secure competitive terms and avoid unnecessary costs.
5. Loan-to-Value Ratio (LVR) and Lenders Mortgage Insurance (LMI)
For expats, LVRs are often capped lower than for Australian residents:
70–80% LVR is common for expat borrowers.
Deposits of 20–30% may be required to avoid LMI.
Policies differ depending on whether the loan is for an owner-occupied or investment property.
6. Non-Resident Spousal Income
If your partner is a non-Australian citizen, their income may not be accepted by some lenders. In cases where it is accepted, lenders may impose restrictions, such as capping the non-resident spouse’s income at the Australian partner’s income level.
7. Spouse Not on Title
If you’re excluding a non-Australian spouse from the property title to avoid foreign buyer duties, many (but not all) lenders may refuse to include their income in serviceability calculations. This is a common issue that requires careful lender selection.
8. Documentation Requirements
Expats often face stricter documentation requirements, including:
Certified proof of income, such as payslips and tax returns.
Identification verification, which may require visiting an Australian consulate.
Proof of assets and liabilities, both in Australia and overseas.
Some lenders with international branches may offer streamlined ID verification processes, saving you time and effort.
9. First Home Buyer Exemptions
Expats returning to Australia to buy their first home may still qualify for state-specific exemptions and grants. These often require you to live in the property for 6–12 months, depending on the state, within the first year of ownership. Ensure you understand the residency requirements in your state.
10. Credit Checks for Non-Australian Spouses
If your spouse is a non-Australian citizen, many lenders will require an overseas credit check. These checks can take time, so it’s essential to prepare early to avoid delays.
Tips for Expats Buying Property in Australia
1. Plan for Currency Exchange Costs
Transferring funds from overseas can be expensive. Using a currency specialist instead of your bank often results in better exchange rates and lower fees. Reach out for tips on this as Jim has extensive personal experience converting currencies at the best rates available.
2. Budget for Upfront Costs
In addition to the property price, consider:
Stamp duty (varies by state and property type).
Legal and conveyancing fees.
3. Get Pre-Approval
Pre-approval gives you clarity on your borrowing capacity and positions you as a serious buyer. Note that pre-approvals are typically valid for 90 days, so time your application carefully.
4. Work with a Specialist Broker
A broker with experience in expat lending can identify the right lenders for your situation, help you navigate documentation requirements, and negotiate the most favourable terms.
Why Work With Us?
We specialise in helping Australian expats secure property loans tailored to their unique circumstances. Jim’s background in Capital Markets has allowed him to build a strong network of Australians living abroad who have successfully purchased homes and investments in Australia.
We’re here to make the process straightforward, efficient, and stress-free.