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Australian mortgages for expats and non-residents

In this guide, we’ll cover what you’ll need to provide to get your Australian mortgage, some of the legal paperwork involved in the process, the banks that offer home loans and mortgages to Australian non-residents, and what to look out for as you go.

Written on 8 November 2022

A life in Australia sounds like a dream for many of us – and thinking seriously about settling there, securing a home and getting a mortgage, can feel daunting and exhilarating in equal measure.

In fact, in recent years things have become more difficult, with major lenders pulling funding for expat buyers.

Even so, from hopeful expats to overseas investors and everyone in between, the quality of your research and the advice you seek is your best defence against the unfamiliar landscape of the Australian mortgage market.

In this guide, we’ll cover what you’ll need to provide to get your loan, some of the legal paperwork involved in the process, the banks that offer home loans and mortgages to non-residents in Australia, and what to look out for as you go.

Things to look out for when considering an Australian Mortgage as a non-resident

The Foreign Investment Review Board

Even if you aren’t a resident in Australia, foreigners can legally buy property there, but it is necessary to obtain approval from the Foreign Investment Review Board (FIRB). It’s a good idea to check that you qualify for this very early on, before you do your other research. Once your offer has been accepted on a property, there’s the matter of getting FIRB approval for that specific property. They charge a fee for this, but will treat you favourably if your purchase somehow supports economic growth in the area, or if the property you're buying is new.

Higher and hidden costs

If you don’t have resident status, you may find that getting a mortgage in Australia is more costly for you than for your Australian neighbours. There’s also the question of whether you’ll be able to sign up for a fixed or variable interest rate. Some banks offer a hybrid combination of the two - which can be sold as a special deal for first time buyers, but then may turn out not to be the best offer available.

Some of the costs that may crop up can include legal fees of up to AUD 3,000, as well as loan establishment fees of up to AUD 1000, FIRB approval fees and foreign citizen stamp duty (which are both based on the value of the property) and property inspection fees that can go up to AUD 1000.

As you can see, it can quickly mount up, so it’s important to start budgeting early on with a good overview of where you’re aiming to be. A good starting point for your budget would be around 5% of the value of the property on average.

It’s good to remember that some costs will need to be paid upfront to buy your new home. One of these will be your FIRB fees, alongside the deposit on your property.

How much can you borrow?

Providing other criteria are met, most borrowers will be able to secure a mortgage of 80% loan to value (LTV) relatively easily. As with any other mortgage, the exact amount that you will be allowed to borrow will be based on your earnings, savings, visa status and credit history among other things.

Once you have been assessed according to these criteria an approximate maximum borrowing and therefore LTV figure will be produced for you.

It’s always helpful to use a borrowing power calculator as a starting point to get an idea of how much you may be able to borrow.

Earning your income outside of Australia

If your salary is in a currency other than AUD (or any major global currency), you may find that some banks are a little more wary about lending to you. This is due to the risk of changes in currency damaging your commitment to the loan.

Some people choose to arrange a home purchase in Australia from overseas, perhaps you’re investing rather than moving to a new house, or before you’ve moved. In these instances, it’s wise to open a local Australian bank account, as this will make paying incidental costs and fees that much easier.

That being said, if your main account is still outside of Australia, you may need to send money to yourself to cover costs – and it’s important to keep an eye on charges incurred by international money transfers when you do.

Getting an Australian mortgage from outside Australia

Bearing in mind that individual banks will always set their own terms, expats can absolutely apply for mortgages to pay for their new homes. However, some of the larger Australian banks don't offer mortgage products to foreign investors.

For British expats, it is sometimes advisable to take out an expat mortgage in the UK. These are available through specialist lenders, and through major global banks (with UK operations) international banking services. It’s important to remember that mortgages for non-UK properties often come with very different costs and terms and conditions than a loan for a property in the UK.

Navigating all of these choices can be a real challenge, so it’s advisable to find yourself a qualified mortgage broker to help you scout out the best deal.

Power of Attorney

While most people are used to a Power of Attorney being assigned with regards to deteriorating health or other diminished capacity such as injury which inhibit your ability to make decisions. However, if you are looking to establish an Australian mortgage but live outside of Australia, some lenders may need to assign an Australian based Power of Attorney. This is also the case for foreign investors.

What you need to provide to obtain an Australian mortgage

When applying for an Australian mortgage, you will need to provide the following documentation and evidence:

  • Copies of personal identification documents (for example: your passport)
  • Proof that you qualify under FIRB rules to buy a property
  • Proof of legal residence in Australia (if you have it)
  • Documents that prove you're creditworthy (things like a credit check, proof of your wages, bank statements, tax returns for the last three years or an employer’s letter)
  • Documents that prove your ability to service the mortgage (these include things like utility bills or bank statements showing that you can afford the monthly payments)

Seek specialist advice to maximise your chances of getting an Australian mortgage

Even if you aren’t a first-time buyer, there are lots of different specialised packages for a range of mortgages in Australia, from the very basic to the ‘professional’ style of package, that can come along with credit cards and other banking services for a discounted price.

If you’re finding it hard to get mortgage locally, there’s also the option of taking out a mortgage at home and using those funds for a place in Australia.

Whatever you decide, it’s always wise to get specialist advice. If you’re looking to get a real overview of all the options that are available to you, it’s best to seek advice from a qualified financial advisor with experience of assisting expats get Australian mortgages.

At Experts for Expats, we can introduce you to Australian mortgage brokers who specialise assisting people living outside Australia obtain an Australian mortgage. Simply request a free introduction and we will arrange for one of our trusted partners to contact you and set up a free initial consultation to discuss your situation in more detail. 

In association with

Odin Mortgage