Non Resident Home Loans

If you’re considering investing in the Australian residential property market as a non-resident, it’s important to understand the requirements and process for obtaining a non-resident mortgage.

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This loan is typically designed for foreign citizens, Australian expats, and temporary residents who desire to purchase property in Australia.

What is a Non Resident Home Loan?

A non-resident home loan in Australia refers to a mortgage loan that is specifically designed for individuals who do not reside in Australia and wish to purchase a property in the country. These Non Resident Home Loans typically have different requirements and conditions compared to traditional mortgage loans for residents.

How Non Resident Home Loans Work in Australia?

Obtaining a non-resident home loan in Australia can be a complex process, but it is possible for qualified borrowers. Some of the key requirements for a non-resident home loan in Australia include proof of income, credit history, and a deposit of at least 30% of the property’s value. Lenders may also consider the borrower’s overseas income and assets, as well as the purpose of the loan (i.e. investment or primary residence). Interest rates on Non Resident Home Loans may also be higher than those for resident loans.

It’s important to note that Non Resident Home Loans are subject to change based on the laws and regulations of Australia. It is recommended to consult with a financial advisor or mortgage broker to understand the current requirements and the best options available.

The approach that most lenders use for non-resident home loans is stricter than the one they typically use for Australian citizens who reside in Australia.

Typically, lenders will consider 80% to 85% of the rent from the property you are buying. However, top lenders may use all of your income from foreign sources if you are in a strong financial position. In most cases, lenders can use between 60-90% of your income, which must be in Australian dollars (AUD); having unique rentals from Australian real property is also considerable.

In some cases, overtime allowances, commissions, and bonus incomes are not counted. Additionally, profits from businesses outside of Australia are evaluated on a case-by-case basis. It’s important to note that Australian tax rates will apply, even if you reside in a country with no income tax (some exemptions).

You can repay your foreign loans to accommodate changes in interest rates (some exemptions). Most lenders will allow you to take out a smaller loan than you may be able to manage.
It’s recommended to consult with a financial advisor or mortgage broker to understand the current requirements and the best options available.

Nationalities Eligible for Home Loans in Australia

Investing in Australia may not be possible for individuals from certain countries due to tax laws. Australian financial institutions and banks have a list of countries that they consider suitable for mortgage applications. We recommend speaking with an accountant before deciding to apply for an Australian mortgage.

The following is a list of countries whose citizens are generally allowed to apply for home loans in Australia, however, it’s important to note that certain conditions may apply:

  1. Austria (subject to conditions)
  2. Belgium (withholding taxes in Belgium may be required)
  3. Canada
  4. China
  5. Denmark
  6. France
  7. Germany
  8. Hong Kong
  9. Hungary
  10. Ireland
  11. Japan
  12. Latvia
  13. Malta
  14. New Zealand (special mortgages are available to NZ citizens)
  15. Norway
  16. Singapore
  17. Sweden
  18. Switzerland
  19. The Netherlands
  20. The United Kingdom (UK)
  21. The United States of America (USA)

Financing for residents of other countries is evaluated on a case-by-case basis, with interest rates typically exceeding 10%. However, as previously mentioned, Australian expats who are not living in any country may qualify for lower interest rates.

Accepted Currencies for Non-Resident Home Finance

It is generally easier to be accepted for a non-resident home loan in Australia when your income is in one of the following currencies:

  • Australian Dollar (AUD)
  • Canadian Dollar (CAD)
  • Chinese Yuan (CNY)
  • Danish Kroner (DKK)
  • European Union Euro (EUR)
  • Great British Pound (GBP)
  • Hong Kong Dollar (HKD)
  • Japanese Yen (JPY)
  • New Zealand Dollar (NZD)
  • Swedish Krona (SEK)
  • Singaporean Dollar (SGD)
  • Swiss Franc (CHF)
  • United States Dollar (USD)

A few lenders may also lend home loans to the following secondary currencies, but the interest rate may vary on a case-by-case basis:

  • Bahrain Dinar (BHD)
  • Brazilian Real (BRL)
  • Bruneian Dollar (BND)
  • Chinese Yuan (CNY)
  • Indian Rupee (INR)
  • Indonesian Rupiah (IDR)
  • Omani Rial (OMR)
  • Macau Pataca (MOP)
  • Malaysian Ringgit (MYR)
  • Mexican Peso (MXN)
  • Norwegian Krone (NOK)
  • Oman Rial (OMR)
  • Papua New Guinean Kina (PGK)
  • Philippine Peso (PHP)
  • Qatari Rial (QAR)
  • Samoan Tala (WST)
  • Saudi Arabian Riyal (SAR)
  • Solomon Island Dollar (SBD)
  • South Korean Won (KRW)
  • South African Rand (ZAR)
  • Sri Lankan Rupee (LKR)
  • Taiwan New Dollar (TWD)
  • Thai Baht (THB)
  • Tongan Pa’anga (TOP)
  • Turkish Lira (TRY)
  • United Arab Emirates Dirham (AED)
  • Vanuatu Vatu (VUV)
  • Vietnamese Dong (VND)

It is important to note that the list of currencies and the conditions are subject to change based on the laws and regulations of Australia. It’s recommended to consult with a financial advisor or mortgage broker to understand the current requirements and the best options available.

Differences in Banks’ Approaches to Non-Resident vs Non-Citizen Home Loans

The lending policies for non-resident home loans can vary among banks. Generally, banks have three distinct views on applications from non-residents. Some banks may reject non-residents as they are viewed as high-risk due to the fact that their financial system is not designed to handle customers located outside of Australia.

However, there are restrictions on lending. Lenders may accept Australian expatriates and temporary residents of Australia, as well as foreign investors, by limiting the amount of credit they can borrow or by requiring additional documents.

For instance, some lenders actively want to enter this market with exclusive lending conditions and may have credit teams specially designed to evaluate requests from non-residents, and 24/7 contact centers that deal with calls from customers overseas. There are usually no limitations on Australian citizens who reside abroad. Lenders also have flexible lending policies for temporary residents, especially 457 visa TSS, 309/310 visa, and Visa holders. It’s recommended to consult with a financial advisor or mortgage broker to understand the current requirements and the best options available.

Accepted Currencies for Non-Resident Home Finance

It is generally easier to be accepted for Non Resident Home Loans in Australia when your income is in one of the following currencies:

  • Australian Dollar (AUD)
  • Canadian Dollar (CAD)
  • Chinese Yuan (CNY)
  • Danish Kroner (DKK)
  • European Union Euro (EUR)
  • Great British Pound (GBP)
  • Hong Kong Dollar (HKD)
  • Japanese Yen (JPY)
  • New Zealand Dollar (NZD)
  • Swedish Krona (SEK)
  • Singaporean Dollar (SGD)
  • Swiss Franc (CHF)
  • United States Dollar (USD)

A few lenders may also lend home loans to the following secondary currencies, but the interest rate may vary on a case-by-case basis:

  • Bahrain Dinar (BHD)
  • Brazilian Real (BRL)
  • Bruneian Dollar (BND)
  • Chinese Yuan (CNY)
  • Indian Rupee (INR)
  • Indonesian Rupiah (IDR)
  • Omani Rial (OMR)
  • Macau Pataca (MOP)
  • Malaysian Ringgit (MYR)
  • Mexican Peso (MXN)
  • Norwegian Krone (NOK)
  • Oman Rial (OMR)
  • Papua New Guinean Kina (PGK)
  • Philippine Peso (PHP)
  • Qatari Rial (QAR)
  • Samoan Tala (WST)
  • Saudi Arabian Riyal (SAR)
  • Solomon Island Dollar (SBD)
  • South Korean Won (KRW)
  • South African Rand (ZAR)
  • Sri Lankan Rupee (LKR)
  • Taiwan New Dollar (TWD)
  • Thai Baht (THB)
  • Tongan Pa’anga (TOP)
  • Turkish Lira (TRY)
  • United Arab Emirates Dirham (AED)
  • Vanuatu Vatu (VUV)
  • Vietnamese Dong (VND)

It is important to note that the list of currencies and the conditions are subject to change based on the laws and regulations of Australia. It’s recommended to consult with a financial advisor or mortgage broker to understand the current requirements and the best options available.

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Case Study: Non Resident Home Loan for US-Based Client

Our client, a US-based individual who frequently travels to Australia, expressed interest in purchasing a house but was unable to secure a loan through traditional banks. We connected him with a private lender who offered him an unsecured loan with a higher interest rate. Despite the slightly higher rate, the client agreed to the terms, and the loan amount was deposited in his account within 72 hours of approval. The client successfully repaid the loan over 24 months and now owns a beautiful house in Melbourne.

Frequently Asked Questions (FAQs)

Which lender would be most suitable for me to apply for a loan for a property that is not my primary residence?

When applying for Non Resident Home Loans, it is crucial to choose the right lender. Our mortgage team includes experts who specialize in lending to new immigrants, Australians living abroad, and foreign investors.

What are the interest rates for a non-resident home loan?

Interest rates for Non Resident Home Loans can vary widely depending on the country and currency of the applicant’s income. Generally, those who earn an income in one of the primary currencies listed (i.e Australian Dollar (AUD), Canadian Dollar (CAD), Chinese Yuan (CNY), etc) typically receive rates similar to those offered to Australian citizens. On the other hand, individuals who earn a salary in a different currency (as listed in the secondary currency section) may have limited lender options and may pay interest rates that are 3% to 4% higher than those typically paid by Australian residents and permanent residents.

What is the process for non-resident home loan applications when the applicant's income is not in Australian Dollars (AUD)?

Even if your income is in a different currency or you are self-employed, we will still consider your loan request. However, you may be required to provide a larger deposit and pay a higher interest rate, typically over 10% per annum.

What is the process for completing a home loan application for applicants who are not residents of the United States?

Obtaining a loan can be made easier by working with an institution that frequently deals with foreign investors. You can provide us with the necessary documents to verify your income and identity to determine your eligibility for an investment mortgage.

Are there any regulations set by the Australian government for non-resident home loans?

Approval from the Foreign Investment Review Board (FIRB) is always required for foreigners purchasing real property in Australia, with the exception of New Zealand citizens and permanent Australian residents.

Is it possible to purchase property in Australia as a business owner?

Obtaining a loan in Australia can be challenging for self-employed individuals. The primary obstacle is that Australian law requires both lender and borrower to verify the source of the funds, making it difficult for business owners to purchase property in Australia. However, it is not impossible.

We can review your application through a specialist lender, but it will depend on your country of origin, the currency of your income, and the evidence of income you can provide.

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