Getting approved for a mortgage can be difficult, especially if you’re applying from Ireland. The banks might assess you as a foreigner, even when you’re an Australian citizen or permanent resident.
Fortunately, as an Australian citizen working or residing in Ireland, most lenders will assess you as an Australian citizen. Let’s find out how you can get approved for a home loan even when you’re not in Australia.
How Much Can I Borrow?
- Australian citizens and permanent resident (PR) visa holders living in Ireland may be able to borrow up to 90% of the property value.
- Self-employed borrowers may be able to borrow up to 80% of the property value with one of our lenders and we have at least one that will use 90% of your net income rather than gross income.
- If you’re a dual citizenship holder or you’re married to a foreign national, some lenders may unfairly treat you as a foreigner so choosing a lender that favours expats is essential to borrowing at the maximum Loan to Value Ratio (LVR).
- If you’re earning Euros but you can’t provide sufficient documents to prove your foreign income, such as recent payslips, or tax returns, then you may be limited to borrowing up to 80% of the property value.
Will I Qualify?
- Get the same interest rates as an Australian citizen.
- Some lenders will use the tax rate of Ireland, as opposed to Australian tax rates, which can greatly improve your borrowing power.
- Loans available for purchase, refinance, investment property or to buy a house and land package.
- A Power Of Attorney (POA) in the name of a solicitor or family member is required by some banks.
Call us on 1300 889 743 (+61 2 9194 1700 from outside of Australia) or complete our free assessment form to speak with one of our mortgage brokers who can help you get approved with the right lender.
How Will My Income Be Assessed?
Many Australian lenders don’t accept foreign currency when it comes to home loan applications from expats. This is one of the main obstacles that Australians in Ireland face.
However, the Euro is one of the most common currencies that Australian lenders deal with. This means you have a good chance of getting approved if you earn your income in Euros.
You can check the Australian Expat Mortgages page to find out which currencies are generally accepted by lenders in Australia.
Will I Pay Higher Interest Rates?
As you’re still considered an Australian citizen, you won’t be charged a higher interest rate. Lenders will generally treat you as a borrower living in Australia.
However, there are lenders that will consider you to be a foreigner. This can reduce your borrowing power significantly.
This shouldn’t affect you if you apply with the right lender. You may even get approved for a significant interest rate discount.
How Does The Home Loan Process Work?
Australians in Ireland qualify for the standard interest rate and discounts like a borrower living in Australia. Lenders will require you to provide only standard documents for the mortgage, provided that you meet all other lending criteria.
Home loans in Australia can be quite flexible and easy to manage once they’ve been set up. Generally, you can:
- Make unlimited additional repayments.
- Easily access/redraw the extra repayments you’ve made.
- Get flexible lending policies and fewer restrictions for borrowers living overseas.
What Are The Costs Involved?
Lenders require you to have at least 5% of the property value to cover the many costs of buying a property in Australia. In particular, these costs can include:
- Conveyancing fees: These include the costs of hiring a conveyancer or solicitor to handle the transfer of the property in your name.
- Inspection fees: You may need to have your building inspected for damage or pests. A strata report may also be required if you’re purchasing an apartment. It’s recommended that you speak with your conveyancer or mortgage broker to confirm if they’re really required.
- Loan fees: You may be charged an application fee, settlement fee or valuation fee by the lender.
- Lenders Mortgage Insurance (LMI): Normally, if you’re borrowing over 80% LVR then you will be charged a mortgage insurance premium or LMI. If you default on your home loan, this is paid as a security to the lenders.
Government Fees To Consider
There are different government fees that you need to consider as well. These include:
- Stamp duty: It’s a tax levied by the government on all property purchases depending on the state the property is in. This is one of the largest expenses when buying a property but stamp duties waivers may be available for qualified applicants.
- Transfer fee: This fee covers the costs of registering your name and removing the owner’s name on the property title.
- Registration fees: You’ll be charged with the fee when you register your lender’s mortgage on the title of the property you purchased.
If you’re buying your first property in Australia, you may be eligible for a stamp duty waiver and other grants, such as the First Home Owners Grant (FHOG).
Find out if you’re eligible for any of these grants by completing our free online assessment form.
How Are My Irish Debts Assessed?
Normally, Australian lenders will assess your Irish debts at Australian interest rates. This may mean that you’ll be assessed at a much higher rate that what you’re already paying.
If you’re currently renting then some lenders will take into account your rent payments when assessing your debts.
Providing your rental statements with your current debts can also help you lower any negative scoring from debts. This is because your rental statements can help prove your ability to cover the costs of the debts.
What Do I Have To Look Out For?
As a general rule, the Australian Taxation Office (ATO) will classify you as a non-resident for tax purposes, if you’ve lived outside of Australia for more than two years.
Note that Australian-sourced income (such as an investment property) and capital gains on Australian property can be taxable in Australia even for Australians in Ireland.
Speak with the tax office and your accountant about this since the ATO uses particular tests to work out whether you’re an Australian or a non-resident.
FAQs
Will Double Taxation Be An Issue?
Australia and Ireland have a Double Taxation Agreement (DTA) in place which protects borrowers from paying their taxes twice. This agreement has been in force since 31 May 1983.
Under the agreement, you won’t incur capital gains tax (CGT) on any capital gain you may make when you sell a property in Australia. Also, you’ll generally be provided a foreign income tax offset on any tax paid on the same income or capital gain in Ireland.
Tax laws change on a regular basis. It’s recommended that you check the ATO website or the Irish Tax and Customs website for the latests updates on taxation. It’s also essential that you speak with your accountant before you buy a property in Australia.
Do I Need The Australian Government’s Approval?
Will I Be Treated As A Foreigner For The Stamp Duty Surcharge?
Am I Restricted To Buying Only A New Property?
What If I’m A Self-Employed Borrower?
We are specialists in Australian expat mortgages!
We’re mortgage brokers who specialise in helping people overseas to buy property in Australia.
Here are a few reasons why you should use our services:
- We’ve helped many customers who are Australian citizens or dual citizens living overseas who want to invest in the Australian property market.
- We will choose a lender that accepts your situation. This way, you can avoid many of the headaches associated with applying for a loan.
- Most of our services are free.
- We know over 50 banks & lenders.
Having an expert mortgage broker in Australia can make all the difference! Please call 1300 889 743 (+61 2 9194 1700 from outside of Australia) or enquire online and our team will contact you to discuss how we can help.