Australian Expat Home Loan: How Aussie expats can still purchase their dream home Down Under

Introduction

Indonesia, the United Kingdom, Hong Kong. Are you one of Australia’s many expats, living and working overseas? Do you want to purchase a property in Australia? Perhaps you’re looking for a holiday home, or to invest in a rental property. If that’s the case, then an Australian Expat Home Loan may be exactly what you need.  

What is it?

An Australian Expat Home Loan is designed for Australians who are living and working overseas, so that they can still borrow money to purchase property in Australia. Those eligible for this kind of loan are expats currently earning a salary from an employer, or those who are self-employed. When it comes to an Australian Expat Home Loan, if you are employed overseas and an Australian citizen you can borrow ninety percent of the value of the property. However, if you are self-employed, you can borrow only up to eighty percent in most cases. Meanwhile, a deposit of ten percent is normally required for expats when purchasing a house back in Australia. Enough money is also needed to pay for property purchasing costs like legal expenses. It is important to note that the interest rate on the mortgage will not be different if you are buying from overseas, except if you cannot show that you are making an income while living outside of Australia.

Challenges

There are a variety of factors that can impact how much money you can borrow, or whether your request for a loan will be approved. Tax rates in some countries are much lower than Australia, and expats in those countries may find it harder to borrow money in Australia for a property. This is because an expats income when judged for a loan by some lenders has Australian tax rates applied rather than that of the nation the expat is actually working in. Different types of currencies can impact your likelihood of receiving a loan. Tier one currencies such as the Japanese Yen, Euros and Hong Kong Dollars will stand you in good stead. Tier two currencies such as the South African Rand, Indonesian Rupiah, and Indian Rupee could potentially get you a loan, though you may face limitations like borrowing power being reduced to eighty percent of the value of the property. Many lenders need you to present a legitimate work visa. However, if you’re a citizen of that nation too (a dual citizen) or have another means to show you have been allowed to work there, you do not have to present a work visa. Even your partner or spouse’s status, if they are not an Australian citizen, could impact your ability to get a loan. You may both be seen as foreign investors when assessed and have to have a bigger deposit and may face a higher interest rate. Negative gearing also cannot be utilized or claimed by expats unfortunately.

Conclusion

In conclusion, buying a home in Australia while living and working in a foreign country can be a complicated business. A mortgage broker can help provide clarity and support when trying to work through this process. If you are looking to purchase property in Australia while living overseas, speak to a Finance Broker like AA Finance Solutions for help and advice.