Getting an expat mortgage on your dream Australian home

If Australia is your preferred expat destination and you’re considering purchasing a new home, mortgages will depend on your residency status and type of visa.

Whether you’re about to become a resident in Oz or are buying a property as a non-resident, using a mortgage broker is the fail-safe way to get what you need. Laws governing mortgages for non-Australians can be tricky, with your visa and residency status as well as the source of your funds limiting which mortgages are actually available. Different lenders have different criteria as regards eligibility, with expats and non-residents often having to resort to a speciality lender.

Non-resident mortgages allow amounts of up to 80 per cent of the chosen property’s value, but a number of lenders use strict rules as to proof of earnings which may exclude money earned in the UK. Fixed rate loans have a maximum term of 12 years, locking down the interest rate but, if your income is in sterling and you’re paying your loan off in Australian dollars, you’ll suffer due to exchange rate fluctuations. UK expats may be able to mortgage via a UK source of specialist loans designed for expatriates and those purchasing holiday homes. Costs, terms and conditions vary, and getting it right can be complicated without professional advice.

As regards the actual property, you’ll need to have approval from Australia’s Foreign Investment Review Board, and there are restrictions on the type of property you can buy. Lenders will require FIRV documentation before approving your mortgage. Once the Australian bureaucracy’s sorted and you’ve found your dream home, a deposit must be paid, FIRB approval must be received and all fees and costs must be settled.

If your mortgage provider is based in the UK, you’ll first need a document from the lender confirming the amount of your borrowing. Costs involved include FIRB fees and a deposit, both of which must come from your British bank account, a costly exercise due to bank charges, transfer fees and your bank's less than generous attitude towards current daily exchange rates. Other costs include stamp duty and legal fees as well as property inspections, with the totals adding up to an average of five per cent of the purchase price.