Foreigner Mortgage

Few Australian banks will lend to foreign investors as this is a complex and high risk area of lending.

This page is a guide for foreign citizens living overseas who would like to apply for a mortgage to buy real estate in Australia.

Can I qualify for an Australian loan?

• You can borrow up to 70% of the purchase price of a new property in Australia with interest rates around 6.50% to 8.00% p.a.
• You can borrow up to 55% at interest rates below 5.00% if you have a high net worth and earn a primary currency.
• If you live in Australia or are married to an Australian citizen, then you can borrow more at lower interest rates.
• Interest only loans available (max 5 year term).
• Our mortgage brokers speak many languages.
• Your income must be in an acceptable currency otherwise we cannot assist you.
• Construction loans and vacant land are available at higher interest rates.
• Foreign business income is only accepted by one or two lenders.

Would you like help to apply for a mortgage in Australia?

Call us on 1300 889 743 (+61 2 9194 1700 from outside of Australia) or complete our free assessment form to get assistance from one of our specialist mortgage brokers.

What are the interest rates?

Interest rates vary significantly depending on the country that you are living in and the currency of your income. People who are receiving an income in a primary currency (see below) tend to get rates similar to Australian citizens.

Whereas people earning an income in another currency (see secondary currencies below) have less lenders available and will typically pay 3% to 4% higher than standard rates paid by Australian citizens and permanent residents.

Which nationalities are allowed to borrow in Australia?

Some countries have tax legislation that makes investing in Australia unfeasible. Our Australian banks and lenders have provided us with a list of countries that they believe to be acceptable for home loan applications.

We recommend that you consult your accountant before deciding to apply for an Australian mortgage.

• Austria (subject to conditions)
• Belgium (you may need to pay Withholding Tax in Belgium)
• Canada
• China
• Denmark
• France
• Germany
• Hong Kong
• Hungary
• Ireland
• Japan
• Latvia
• Malta
• New Zealand (special mortgages are available for NZ citizens)
• Norway
• Singapore
• Sweden
• Switzerland
• The Netherlands
• The United Kingdom (UK)
• The United States of America (USA)

Finance for residents of other countries is available on a case-by-case basis at interest rates above 10%. Australian expats who are not living in one of the countries listed above are eligible for lower interest rates.

Buying A Home in Australia As A Non-Resident

Everything you need to know as a non-resident buying a property in Australia.

Foreign income mortgage calculator

Discover if the bank will accept your foreign income

Which currencies are preferred?

Primary currencies

It’s much easier to get approved if your income is in one of the below 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 Kroner (SEK)
• Singaporean Dollar (SGD)
• Swiss Franc (CHF)
• United States Dollar (USD)

Secondary currencies

There are select lenders that will lend for the following currencies; however, higher interest rates will apply:

• 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)

If you’d like to buy an investment property in Australia and are looking for lenders in Australia, please call us on +61 2 9194 1700 or complete our free assessment form and one of our brokers will contact you to further discuss your options.

What if I earn in a different currency?

We can still consider your loan application if you earn an income in another currency or you’re self-employed.

However, you may need to provide a larger deposit and will pay a high interest rate, often over 10% p.a.

If you already own a property in Australia, you have a very high income and you’re borrowing less than 60% of the property value then we may be able to make an exception to this. Please contact us for more information.

How do they calculate borrowing power?

The lender that we apply with will complete a ‘serviceability assessment’ to work out how large of a loan you can afford to repay.

The method that they use is much stricter than what they normally use with Australian citizens living in Australia.

Most lenders will use

• 80% – 85% rental income from the property you are buying.
• Our best lenders will actually use 100% of your foreign income as long as you’re in a strong financial position.
• In most cases though, lenders will use between 60% and 90% of your actual income so you may need to bear some money in Australian dollars (AUD) or be earning substantial rental income from Australian real estate.
• In some cases overtime, allowances, commission and bonus income are ignored.
• Income from businesses outside of Australia (case by case basis).
• Australian tax rates even if you are living in a country without income tax (some exceptions).
• Loaded repayments on your foreign loans to allow for interest rate movements (some exceptions).

That means that most lenders allow you to borrow much less than you can actually afford!

If you apply with the right lender, you’ll have your income accepted and a much higher chance of getting approved.

Call us on 1300 889 743 (+61 2 9194 1700 from outside of Australia) or complete our free assessment form to get assistance from one of our specialist mortgage brokers.

Can banks use my lower overseas tax rate?

The tax rates for a number of countries are much lower than Australian tax rates.

Finding a lender that will use your foreign tax rate means more of your income can be used so you can borrow more.

The biggest challenge is that the lenders that will use overseas tax rates will only do so if they can see tax withheld from your payslips.

This can be difficult if you’re living in Hong Kong, where you pay tax in instalments, or in the UAE or Saudi Arabia, where you don’t pay tax at all.

Please complete our free assessment form and let one of our foreigner mortgage specialists know about your situation. We’ll tell you how we can help!

Are there location restrictions?

There are only a handful of lenders that offer foreigner mortgages and because of that their appetite for acceptable property locations can change regularly.

Lenders prefer metro or Category A (CAT A) properties located in:

• Melbourne, Victoria (VIC)
• Sydney, New South Wales (NSW)
• Brisbane, Queensland (QLD)

You may either be knocked back for a loan or at least find it difficult to get approved if you’re looking to purchase in the following locations:

• Outside of Brisbane metro: This includes Warwick (4370), Toowoomba (4350), Stanthorpe (4380), Kilcoy (4515), Dalby (4405), Crows Nest (2065) and Boonah (4310).
• Outside of Sydney metro: This includes Albury (2640), Bathurst (2795), Goulburn (2580), Dubbo (2830), Parkes (2870), Orange (2800), Griffith (2680), Bowral (2576) and Forbes (2871).
• Outside of Melbourne metro: This includes Ballarat (3350), Beechworth (3747), Castlemaine (3450), Echuca (3564), Mildura (3500), Shepparton (3630), Swan Hill (3585) and Wodonga (3690).
• South Australia (SA): This includes such locations as Adelaide (5000), Mount Gambier (5290-1), Gawler (5118), Whyalla (5600), Murray Bridge (5253), Stirling (5152), Mount Barker (5251), Port Lincoln (5606), Port Pirie (5540) and Port Augusta (5700).
• Northern Territory (NT): This includes Darwin (0800), Alice Springs (0870-2), Palmerston (0830), Katherine (0850), McMinns Lagoon (0822), Nhulunbury (0880), Howard Springs (0835), Tennant Creek (0860), Yulara (0872) and Jabiru (0886).
• Tasmania (TAS): This includes such locations as Hobart (7000), Launceston (7250), Devonport (7310), Burnie (7320), Kingston (2604), Ulverstone (7315), New Norfolk (7140), Wynyard (7325), George Town (7253) or Sorell (7172).
• Western Australia (WA): This includes Perth (6000), Rockingham (6168), Mandurah (6210), Bunbury (6230), Kalgoorlie (6432), Geraldton (6530), Albany (6330), Kwinana (6167), Broome (6725) and Busselton (6280).

How does the loan application process work?

Obtaining your finance is relatively simple if you apply with a lender that commonly works with foreign investors.

You can then send us the required documents so that we can verify your income, confirm your identity and make sure that you’re eligible for a buy to let mortgage. We can then arrange the paperwork for you and seek an approval from the lender we have selected.

For most loan types, our services are free.

You can call us on 1300 889 743 (+61 2 9194 1700 from outside of Australia) or simply fill in our free assessment form and we can help you apply for a loan with an Australian bank.

Is approval from the Australian government required?

Yes, Foreign Investment Review Board (FIRB) approval is required for foreign nationals buying real estate in Australia.

The only exceptions are New Zealand citizens and permanent Australian residents.

Beware of the rules around foreign ownership and tax

Stamp duty levy

The states of New South Wales, Queensland, Victoria and South Australia currently apply a stamp duty surcharge to foreign citizens.

All other Australian states do not currently have a stamp duty surcharge.

The actual amount you’ll be charged and the rules around when the surcharge applies varies from state to state.

Please read more on the foreign citizen stamp duty for information and to stay up to date with any further changes that may be announced by state governments.

Ghost tax

Following on from the stamp duty levy introduced in 2016, the Government introduced a so-called “ghost” tax in the 2017 Federal Budget.

Foreigner property owners will be slugged with a minimum $5,000 per year levy for property they either fail to occupy or lease out for at least 6 months of the year.

The Capital Gains Tax (CGT) exemption has been scrapped

Since 1 July 2016, foreign investors were subject to a Capital Gains Tax (CGT) (withholding tax) of 10% when they sold their own residential home. However, this only applied to properties worth $2 million or more.

From 1 July 2017, this threshold has been reduced to $750,000 and the withhold tax rate increased to 12.5%.

This change will affect many foreign investors buying in Sydney and Melbourne metro areas since the median house price is much higher than $750,000.

Foreign ownership of new developments

Are you considering purchasing an off the plan unit?

You may find yourself locked out since the Government introduced a 50% cap on foreign ownership of new developments, effective from 1 July 2017.

Learn more about the risks of buying off the plan and why it can go so wrong.

Can a business owner buy property in Australia?

Borrowing money in Australia is much more difficult if you’re self-employed.

The main reason for this is that under Australian law both your mortgage broker and lender are required to verify your income and, in many cases, that isn’t possible.

We can consider your application using a specialist lender but this will depend on the country that you’re from, the currency of your income, and the amount of income evidence that you can provide.

A couple of our lenders are happy to consider your application if the country in which you are self-employed has easily readable and understandable tax returns.

Generally speaking, the more evidence you can provide, the more likely lenders will consider an application from a self-employed foreigner.

What can we do for self-employed borrowers?

• Prove your income with 2 years tax returns, 6 months bank statements or an accountant’s letter.
• You may also need to provide a full credit history from your country of origin.
• Your living expenses can be assessed based on the country you live in.
• If more than 25% of your income is from a business you are classified as self-employed.

Please call us on +61 2 9194 1700 or complete our free assessment form and one of our brokers will contact you to discuss your options.

Why did so many Australian banks stop lending to foreigners?

From 2005 up until 2016, there was a significant increase in the number of foreign investors wanting to buy in Australia. Unfortunately, many of the loan applications contained false documents or were used to launder money earned illegally overseas.

As a result, most banks stopped lending to foreign investors as well as temporary residents of Australia and, in some cases, Australians living overseas.

CBA was the first bank to leave the foreign investor market, citing that it was not a business that they were interested in.

Westpac, a bank of choice for foreign investors, soon followed, pulling out of the market in 2016.

ANZ was forced to change their policies after they were inundated with applications following Westpac’s exit.

The only one left standing is NAB, who have since changed their policies to be much more restrictive, forcing many foreign investors to look to second-tier lenders and private banks.

What languages do our mortgage brokers speak?

We’re able to help people from a wide range of ethnic backgrounds to apply for an Australian mortgage. Our staff can speak the following languages:

• English
• Cantonese
• Mandarin
• Arabic
• French
• Nepali
• Bengali
• Hindi
• Urdu
• Turkish
• Vietnamese
• Tagalog
• Other languages are available via an interpreter

How can we help you qualify?

We are mortgage brokers who specialise in non-resident home loans! We can help make the entire process of applying for a home loan to buy Australian property as simple as possible.

If you’d like to buy an investment property in Australia and are looking for foreign national lenders in Australia, please call us on +61 2 9194 1700 or complete our free assessment form and one of our brokers will contact you to further discuss your options.

If you’re from Australia, call us on 1300 889 743 to speak to our expert team of brokers.