Australian expats often move overseas with the goal of taking advantage of both higher wages and lower taxes. For that reason, they want to use their higher income to obtain an expat mortgage in Australia.
The guidelines and Credit Policy for most banks are quite different for Australian expats who are looking to apply for a loan to buy an Australian property and this needs to be taken into account from the outset as it can have a significant impact on your borrowing capacity.
Generally speaking, it’s possible to borrow up to 70-80% of the property’s value and in some circumstances also up to 85% and not pay Lenders Mortgage Insurance (LMI) as an expat.
Currencies
One of the key differences between Aussie expat home loans and loans issued to those currently residing in Australia is that lenders will not accept all foreign currencies.
While all lenders have different policies, generally the main currencies that will be accepted as a form of income include the United States Dollar (USD), Great Britain Pounds Sterling (GBP), Euro (EUR), Singapore Dollar (SGD), Canadian Dollar (CAD), United Arab Emirates Dirham (AED), Hong Kong Dollar (HKD), Japanese Yen (JPY), Swiss Franc (CHF) and the New Zealand Dollar (NZD).
There are other currencies that are accepted, however, you might be forced to borrow at a lower LVR.
Interest Rates
Generally speaking, some lenders don’t offer discounted rates on Aussie expat home loans, however, the actual rate is comparable to most standard home loans and you should be able to obtain the maximum rate discount if you engage a broker that specialises in foreign income loans. Again, this will differ on a case-by-case basis.
As with most lenders, if you are unable to provide standard proof of income you will likely be forced to pay a higher interest rate or be ineligible for a loan
LVR and LMI
Some Aussie expat home loans are available up to a 90% LVR, however, the borrower will be required to pay Lenders Mortgage Insurance (LMI) which can be quite substantial. Alternatively, you may be able to access an 85% LVR loan and not pay any LMI if you meet certain special criteria
Unlike within Australia, where some lenders offer home loans at higher 90% LVRs without the need to pay LMI to certain professions such as Doctors, Accountants or Lawyers, this is not available to expats. If you engage a specialist foreign income broker, they may be able to advise expats living in the UK, USA, Hong Kong, and Singapore on how to obtain a loan as an expat that can be converted to one of these specialised loans when you repatriate back to Australia.
Tax Implications and Currency Fluctuations
It’s important to note that Australia has some of the highest tax rates in the world and different lenders will assess your income based on an Australian tax rate. This can mean your borrowing power is significantly reduced.
Similarly, given the fact that currencies fluctuate in value, many lenders will only accept a certain percentage of your income (60-90%) in a foreign currency to make sure they are protected in the advent of an adverse currency move.
It’s also worth noting that any negative gearing tax benefits won’t be included for Aussie expat home loans when assessing serviceability.
Home Loan Options for First Time Buyers
Many young couples head overseas with the goal of setting themselves up financially and purchasing an investment property that will eventually become their principal place of residence when they return. There are a number of home loan options for first-time buyers who happen to be expats. It’s important to consider the type and nature of your income and you’ll also be unlikely to qualify for the first home buyer exemptions and bonuses as they are predominantly focused on owner-occupied properties, although this can work in certain circumstances.
In this week`s Q&A, we`re tackling a query from one of our viewers:
"Will I be required to pay 50% more tax on the capital gain from my property sale?"
The Capital Gains Tax Discount, overseen by the Australian Taxation Office (ATO), is a tax concession for individuals, trusts, and complying superannuation funds who sell certain assets and result in a capital gain. This discount effectively reduces the taxable portion of the capital gain, providing relief to taxpayers.
It`s essential to remember that tax laws and rates are subject to change over time. Therefore, we strongly advise seeking guidance from a qualified tax professional to obtain the most current information and personalized advice tailored to your circumstances. Should you have any further questions, please feel free to reach out to us.
#tax #australia #discount #finance #financialplanning #aussieexpats #property #investment #assets #taxplanning #advice #strategy #wealth #building #growth #success
In this week`s Q&A, we will answer a question from one of our viewers.
"How can I further reduce my monthly mortgage payments?"
You can consider several options to reduce your monthly mortgage payments. One is refinancing to secure a lower interest rate or extending the loan term for more manageable payments spread over a longer period.
However, it`s important to be mindful that adjustable-rate mortgages may offer initial relief but could result in potential interest rate hikes later on.
Therefore, it`s crucial to carefully evaluate the long-term impact of each option and consider consulting with a financial advisor or mortgage professional to determine the best course of action based on your circumstances. If you have any questions or need personalized information, please don`t hesitate to contact us.
#mortgage #australia #refinance #finance #investment #realestate #property #advice #strategy #homeloans #mortgagetips #financialplanning #home #future #growth #success #portfolio
In this week`s Q&A, we will answer a question from one of our viewers.
"How can I use debt recycling to reduce my home loan?"
Debt recycling is a financial strategy where you leverage the equity in your home to invest in income-generating assets. However, it`s important to consider the risks involved, such as potential fluctuations in investment returns and interest rates.
Consulting with a financial advisor or mortgage broker can help determine if debt recycling suits your financial goals and circumstances. If you have any questions or need personalized information, please don`t hesitate to contact us.
#australia #finance #mortgage #advice #investment #realestate #property #investor #strategy #financialplanning #wealthbuilding #debtfree #growth #debtrecycling #debtreduction #financialfreedom
In this week`s Q&A, we will answer a question from one of our viewers.
"Will future interest rates create more opportunity for middle-range income earners to invest in property?"
Lower interest rates generally make borrowing cheaper, potentially increasing accessibility to property investment, but the overall economic environment, housing market conditions, and government policies also impact affordability and investment incentives.
If you have any questions or need personalized information based on your circumstances, please don`t hesitate to contact us.
#australia #economy #finance #investment #realestate #financialplanning #propertyinvestment #home #mortgage #advice #strategy #opportunity #growth #financialfreedom
As we navigate the dynamic landscape of the Australian economy, staying informed and engaged is essential. With that in mind, I`m excited to invite you to our upcoming Quarterly Review, scheduled for 20th/21st February.
We will delve into the current state of the Australian economy, shedding light on the challenges and opportunities within the mortgage finance market amidst these extraordinary times.
To secure your spot, please register through the following link: https://rebrand.ly/Feb2024_quarterlyreview
If you have any questions or concerns, please don`t hesitate to reach out.
#australia #economy #finance #inflation #global #wealthbuilding #growth #financialplanning #investment #realestate #strategy #advice #investor #success #homebuying
In this week`s Q&A, we delve into a viewer`s query regarding potential windfalls for Australian expats earning in US dollars.
The value of the Australian dollar is subject to a complex interplay of factors, including interest rate decisions, economic indicators, commodity prices, central bank policies, political stability, and market speculation.
These elements collectively influence the performance of the AUD in currency markets. Notably, Australian expats earning in US dollars may find favourable conditions, particularly when contemplating future investments such as homes or properties in Australia.
The dynamics of these factors could provide a beneficial tailwind, enhancing the potential outcomes for expatriates considering financial moves back home.
If you have any questions or need personalized information based on your circumstances, please don`t hesitate to contact us.
#australia #economy #finance #investment #realestate #currency #growth #strategy #advice #financialplanning #propertyinvestment #2024 #wealth #future #sydney #brisbane #dreamhome
In this week`s Q&A, we will answer a question from one of our viewers.
"Will the Australian Dollar fall further?"
Predicting currency movements is highly uncertain and influenced by numerous factors such as economic indicators, geopolitical events, and market sentiment.
Various factors could affect the Australian dollar in 2024. These include changes in interest rates, global economic conditions, commodity prices and government policies.
If you have any questions or need personalized information based on your circumstances, please don`t hesitate to contact us.
#australia #economy #finance #inflation #currency #investment #financialplanning #advice #strategy #planning #future #wealth #success #investor #currencyexchange #growth #propertyinvestment
In this week`s Q&A, we will answer a question from one of our viewers.
"Will housing prices decline now that interest rates are high?"
While higher rates can increase borrowing costs and potentially dampen demand for homes, the effect is nuanced. High-interest rates may seem like a disadvantage for those who need to take out a loan or buy something on credit, but investors can benefit by planning ahead and investing in suitable types of investments.
If you have any questions or need personalized information based on your circumstances, please don`t hesitate to contact us.
#australia #finance #economy #investment #realestate #wealth #mortgage #firsthome #financialplanning #future #success #property #strategy #sydney
