Can Non-Residents Get a Mortgage in Sydney? Here’s What You Need to Know

At Unconditional Finance, we prioritise making this process smoother for you. With our tailored guidance, we ensure you secure the best mortgage option while navigating the specific challenges that non-residents face. Our experienced mortgage brokers in Sydney will help you through every step, from application to approval.

Who is Eligible for a Non-Resident Mortgage in Australia?

Non-residents who are eligible for a mortgage include:

• Australian Expats: You can apply for a mortgage like a resident, but foreign income and credit history will be assessed. 
• Foreign Investors: Non-citizens can apply but are typically limited to new or off-the-plan properties unless redeveloping established homes. 
• Temporary Visa Holders: You can buy a home to live in but generally can’t invest in established homes unless you plan to redevelop. 

If you’re unsure which category you fall into, our mortgage brokers in Sydney can help clarify your eligibility and find the right mortgage for your situation.

What Are the Lending Criteria for Non-Resident Mortgages?

Lenders typically discount foreign income by 20-30%, especially for currencies like INR or volatile currencies. If you’re an Australian expat with both local and foreign income, lenders may prioritise your Australian income.

Example: An expat earning in both GBP and AUD from a Sydney-based investment will find it easier to secure a mortgage than someone earning in a less stable currency like INR.

Understanding how your foreign income affects your borrowing capacity can be challenging, but we can guide you through the process to ensure you get the best rates possible.

Do Non-Residents Need FIRB Approval to Buy Property in Sydney?

Yes, most non-residents need FIRB approval, but the rules vary:

• Foreign Investors: FIRB approval is required for any purchase, but it’s only allowed for new builds or off-the-plan homes unless redeveloping.
• Temporary Visa Holders: You can buy an established home without FIRB approval but must sell it when your visa expires or if you leave Australia.
• Australian Expats: No FIRB approval is required for Australian citizens or permanent residents, even if they live overseas.

FIRB approval typically takes 30-40 days, and fees are based on property value. If you need assistance navigating the FIRB approval process, contact our team, and we’ll help you expedite the process.

How Do Interest Rates for Non-Residents Compare to Those for Residents?

Non-residents typically face higher interest rates due to increased risks, such as currency volatility.

• Foreign Investors: Rates are generally 1-2% higher due to the perceived risk of foreign income and currency fluctuations.
• Expats Earning in Stable Currencies: Expats earning in stable currencies (like USD, EUR, or GBP) may get better rates than those earning in weaker currencies.

Example: A South African investor might be offered a higher interest rate compared to an Australian expat earning in US dollars, as USD is seen as more stable.

Rates can vary significantly, and our Sydney mortgage brokers can help you compare options to secure the most competitive rate available for non-residents.

Can You Use Foreign Income to Qualify for a Mortgage?

Yes, foreign income can be used, but lenders often discount it by 20-30% due to currency risks. Stronger currencies like USD, EUR, or GBP may be less discounted, while income from volatile currencies may be discounted more.

Example: A non-resident earning in Indian rupees might see a 30% discount on their income, while an expat earning in US dollars might get better consideration due to the stability of the currency.

If you need help calculating how much of your foreign income qualifies, reach out to our expert team for a personalised assessment.

What Documents Are Required for a Non-Resident Mortgage Application?

Regardless of your status, you’ll generally need:

• Passport (identity verification)
• Proof of Income (payslips, tax returns, business income statements)
• Credit Reports (from Australia and your home country)
• FIRB Approval (if you’re a foreign investor)

Missing a key document can delay the process. We can ensure you have everything prepared for a smooth and hassle-free application.

What Taxes and Costs Do Non-Residents Need to Consider?

Case 1: Stamp Duty for Non-Residents

Non-residents face an additional stamp duty surcharge of 7-8% in NSW. This applies even if you are buying a home to live in. In addition to stamp duty, non-residents may also need to budget for ongoing costs like council rates, land tax, and property management fees, especially if the property is for investment purposes.

Example: A Canadian investor buying a property in Sydney for $1.2 million will pay an extra $84,000 in stamp duty compared to a resident buyer.

Case 2: Temporary Visa Holders

Temporary visa holders also face the stamp duty surcharge, but if they become permanent residents, they may qualify for a refund.

Example: If a US citizen on a temporary visa becomes an Australian permanent resident within 12 months of buying their property, they can apply for a refund of the extra stamp duty surcharge.

If you’re concerned about hidden costs or taxes, our finance brokers in Sydney can help you budget appropriately and explore options for refunds or exemptions.

How Long Does It Take for a Non-Resident Mortgage to Get Approved?

Case 1: FIRB Approval Delays

If you need FIRB approval, the mortgage process can take an extra 30-40 days. This means your mortgage approval could take anywhere from 4 to 8 weeks.

Example: A foreign investor from Germany applying for a mortgage in Sydney should expect a longer process due to FIRB approval, which may add several weeks to the timeline.

Case 2: Temporary Residents with Full Documentation

Temporary visa holders with their documents in order (e.g., visa details, proof of income) can speed up the process and may get approval in as little as 3-4 weeks.

To get a clear timeline for your approval, contact our team, and we’ll guide you through the steps to avoid unnecessary delays.

What Properties Can Non-Residents Buy in Sydney?

Non-residents can buy:

• New Builds or Off-the-Plan Properties: Foreign investors are generally limited to these types of properties.
• Established Homes: Temporary residents can buy established homes, but only if they plan to live in them. They must sell when their visa expires.
• Vacant Land: Foreign investors can buy vacant land for development, but FIRB approval is required. There are strict conditions that the land must be developed within a set time frame.

Example: A UK resident looking to invest in a new apartment complex in Sydney will need FIRB approval. A temporary resident on a 457 visa can buy an established home to live in but must sell it if they leave Australia.

If you’re exploring your property options, talk to our Sydney mortgage brokers for the latest advice on property eligibility and FIRB requirements.

How Can Non-Residents Improve Their Chances of Mortgage Approval?

To boost your chances of mortgage approval, consider:

• Increase Your Deposit: A deposit of 20-30% or more strengthens your application.
• Show Consistent Income: Regular, verifiable income from both local and foreign sources appeals to lenders.
• Maintain a Good Credit Score: It’s important to have a strong credit history both in Australia and your home country.
• Use a Guarantor: An Australian resident guarantor can lower your required deposit and increase approval chances.

Need assistance? Our brokers in Sydney can help you strengthen your application and increase your chances of securing a mortgage.

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