Are You an Australian Expat? Here’s How to Secure Your Home Loan with Confidence

At Unconditional Finance, we prioritise making complex financial processes simple and tailored to your unique needs as an expat. Our experienced team ensures you find the best home loan options while providing clear guidance every step of the way. We understand that each expat’s situation is different, and we take the time to deliver customised solutions so you can make confident property investments in Australia.

Understanding Australian Expat Home Loans

What are Australian Expat Home Loans?

Australian Expat Home Loans are specifically designed for Australians living abroad who wish to invest in property back home. These loans differ from regular home loans in a few key ways. Lenders see expats as a slightly higher risk due to foreign income, currency exchange, and fluctuating employment conditions overseas. For this reason, they might require more documentation and higher deposits compared to loans offered to residents. Additionally, some government regulations apply to expats that don’t apply to local buyers, which is why working with specialised lenders is essential.

Eligibility and Documentation

Am I eligible for an Australian Expat Home Loan?

Eligibility for an expat home loan depends on several factors. First, your residency status—whether you’re an Australian citizen or permanent resident living abroad—plays a crucial role. Second, your income must be stable, regardless of where it’s earned. Lenders will also want to see that you’re employed by a reputable company or have a steady self-employment income. Additionally, the country you’re residing in may affect your eligibility, as certain lenders are more comfortable with expats living in countries like the UK, USA, or Singapore compared to other regions.

If you’re unsure about your eligibility or want to know the best options for your situation, please contact us, and we can provide clarity and guide you through the process.

What documentation do I need to apply for an expat home loan?

To get an Australian Expat Home Loan, you’ll need to submit these documents:

• Overseas pay slips or proof of income.
• Employment contract or self-employment documentation.
• Tax returns from your country of residence.
• Recent bank statements to show your savings and expenses.

Having these documents ready can help speed up the process. It’s also a good idea to have a certified copy of your passport and proof that you’re an Australian citizen or permanent resident. Organising your paperwork in advance will help you avoid delays and make the process smoother.

How can I prove my income if I’m self-employed or paid in multiple currencies?

To prove your income, most lenders will require:

• Payslips or foreign tax returns (if they’re in English, that’s even better).
• Three months of bank statements showing your salary being deposited.

If your documents aren’t in English, many lenders have staff who can work with translated documents, so that’s usually not an issue.

For self-employed expats, proving income can be trickier, but there are still options. If you can provide:

• Two years of personal and business tax returns,
• Six months of business bank statements,
• And a signed letter from your accountant confirming how much you earn,

You may be able to borrow up to 70-80% of the property’s value.

If you’re earning in multiple currencies, and both are on the preferred currency list, lenders can usually work with that. They will use different exchange rates for each currency, which may affect how much you can borrow. Even if your currencies aren’t on the list, there are still lenders that may approve your loan, though the terms might differ slightly.

It’s important to discuss your specific situation with an experienced mortgage broker, as each case is unique and specialised guidance can increase your chances of approval.

Do I need the Australian government’s approval to buy the property?

In most cases, if you’re an Australian citizen or permanent resident, you won’t need Foreign Investment Review Board (FIRB) approval to purchase a property. However, if you’re buying with a non-Australian partner or looking to invest in certain types of properties, you might need approval. If you’re unsure, it’s always good to check the guidelines early in the process to avoid delays.

What about my foreign partner’s salary?

Most lenders will typically ignore your partner’s income if they’re not an Australian citizen or permanent resident. But there are some cases where their income might be considered, especially if they have close ties to Australia, such as:

• They hold a valid Australian visa.
• They are living in Australia.
• They have close family ties in Australia.
• You have children together.
• You’ve been married or in a defacto relationship for more than two years.
• You are the main income earner.

Lenders are sometimes flexible, but each case is unique. If you’re unsure, it’s best to talk to an expat mortgage broker who can assess your specific situation and help find a lender willing to consider your partner’s income. Contact us or fill out our free assessment form to get personalised advice.

Choosing the Right Lender

Which lenders specialise in expat home loans, and how do I choose the best one?

Not all lenders are comfortable with expat loans, so it’s essential to work with a lender that understands your needs. Some of the best options are specialist mortgage brokers or banks with expat loan programs. When choosing a lender, consider factors like interest rates, fees, their reputation with expats, and whether they have experience with foreign income. Also, look for lenders who are flexible with overseas documentation.

How do lenders assess foreign income and currencies?

Lenders convert your foreign income into Australian dollars, usually using a conservative exchange rate. They may discount your income by up to 20-30% to account for currency fluctuation risks. They will also review the strength and stability of the economy where you’re working, so expats in countries with strong currencies like USD or GBP may find it easier to qualify.

What if my partner is a foreign citizen, or we apply together?

If your partner is not an Australian citizen, the lender may apply stricter guidelines or require additional documents. Some lenders may also limit your borrowing capacity based on your partner’s foreign residency. If you’re applying for a loan with both names on the loan but only one on the property title (“one on title, two on loan”), be aware that both parties are still responsible for the loan repayment, but only one will own the property.

Will lenders accept my foreign currency?

Not all currencies are accepted by Australian lenders, but many of the most common foreign currencies are. These include:

USD, GBP, EUR, SGD, CAD, AED, HKD, JPY, CHF, NZD, CNY (Conditions apply)

If you earn in any of these currencies, you’re more likely to get approved for a home loan. However, if you earn in a less common currency, restrictions may apply. For example, you may be limited to borrowing only 80% of the property value. Some currencies in this category include:

BHD, BND, DKK, FJD, INR, IDR, KWD, MOP, MYR, NOK, OMR, PGK, PHP, QAR, WST, SAR, SBD, SAR, KRW, LKR, TND, TBH, TOP, TRY, VUV, VND

Even if your currency isn’t listed here, some lenders are more flexible and may still approve your loan. Currency acceptance rules can change, so it’s crucial to speak with an expert. 

If you’re unsure, contact us or fill out our assessment form for tailored advice based on your specific currency and situation.

Loan Terms, Deposits, and Costs

What deposit is required for expat home loans, and will I pay higher interest rates?

Australian expats usually need a larger deposit than residents. Most lenders ask for at least 20-30% of the property value. Expats often face slightly higher interest rates due to the added risk of foreign income and currency exchange. However, shopping around with specialist lenders can help you find competitive rates that are only slightly higher than what residents would pay.

What types of loans are available to Australian expats?

Expat home loan options include fixed-rate, variable-rate, and interest-only loans. Fixed-rate loans give you stability, locking in the same rate for a set period, while variable-rate loans might offer more flexibility with the potential for rates to change over time. Interest-only loans could be a good option for expats who want to keep their initial costs low while planning to rent out the property or expecting a significant income change in the future.

Tax and Legal Considerations

What are the tax implications and costs of buying property in Australia as an expat?

As an Australian expat, you’ll still be subject to certain taxes when buying property in Australia. This includes stamp duty, which varies by state, and potentially capital gains tax (CGT) when selling the property. If you’re classified as a foreign investor (e.g., buying with a non-resident partner), you may also face the foreigner stamp duty surcharge, which is an additional tax applied in some states like New South Wales.

If you’re renting out the property, you’ll need to declare rental income in your tax returns, both in Australia and your country of residence, depending on local tax laws. Working with a tax advisor who understands both Australian and foreign tax regulations can help ensure you comply with both systems and avoid costly mistakes.

Property Buying and Special Circumstances

Can I buy property in Australia as an Australian expat, and how does the “one on title, two on loan” rule apply?

Yes, Australian expats can buy both investment and owner-occupied properties in Australia. However, if you and your partner are taking out a loan together but only one of you is listed on the property title (“one on title, two on loan”), the legal responsibility to repay the loan is shared, even though the property ownership is not.

What are the restrictions on property types or locations for expats?

While there aren’t specific restrictions for expats buying property in Australia, lenders may be hesitant to finance certain property types, such as rural properties or apartments in high-density areas. Be sure to check with your lender before committing to a property.

Process and Practical Considerations

What’s the process for applying for an Australian Expat Home Loan, and will I need a Power of Attorney (POA)?

To apply, start by gathering your documents, including proof of income and residency status. After submitting your application to a lender, you may need a Power of Attorney (POA) to sign legal documents if you’re not able to be present in Australia. This allows someone to act on your behalf during the property purchase.

When do I need to visit the Australian embassy, and will there be costs?

You may need to visit the Australian embassy for document certification, especially if you’re signing contracts or submitting formal documents that require legal verification. Embassies typically charge fees for these services, so it’s a good idea to check the cost ahead of time.

Investment Timing and Market Considerations

Is now the right time to invest in the Sydney property market, and how does currency exchange affect my borrowing power?

The Sydney property market has always been strong, but it’s important to choose the right time to invest. Keep an eye on home prices, interest rates, and market conditions. Currency exchange rates also play a big role in your borrowing power. A favourable exchange rate can increase your ability to secure a larger loan, but if the currency fluctuates, it could affect your repayment amount or reduce your borrowing capacity.