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Non Resident Mortgages
A guide for foreign investors and expats.
What are non resident mortgages?
Non resident mortgages are home loans for people who are not Australian citizens or permanent residents. They are also known as foreign investment mortgages or foreign citizen mortgages. Non resident mortgages allow foreign investors and expats to buy property in Australia, subject to certain rules and regulations.
Who can apply for non resident mortgages?
There are different types of non resident mortgages depending on the status and situation of the borrower. Some of the common categories are:
- Temporary residents: These are people who have a valid visa to live and work in Australia for a limited period of time, such as skilled workers, students, or partners of Australian citizens. Temporary residents can apply for non resident mortgages with some lenders, but they may need to pay a higher interest rate or a larger deposit than Australian citizens.
- Foreign investors: These are people who live outside Australia and want to buy property in Australia for investment purposes. Foreign investors can apply for non resident mortgages with some lenders, but they may face stricter lending criteria and higher fees than Australian residents. They also need to comply with the Foreign Investment Review Board (FIRB) rules and pay a stamp duty surcharge in some states.
- Expats: These are Australian citizens or permanent residents who live and work overseas and want to buy property in Australia. Expats can apply for non resident mortgages with some lenders, but they may need to provide more documentation and evidence of their income and assets than Australian residents. They may also need to pay Australian tax on their rental income and capital gains.
What are the benefits of non resident mortgages?
Non resident mortgages can offer several benefits for foreign investors and expats, such as:
- Access to the Australian property market: Non resident mortgages can help foreign investors and expats diversify their portfolio and take advantage of the growth and stability of the Australian property market.
- Potential capital growth and rental income: Non resident mortgages can help foreign investors and expats generate capital growth and rental income from their Australian property, especially in high-demand areas and suburbs.
- Future relocation or retirement: Non resident mortgages can help foreign investors and expats secure a property in Australia for their future relocation or retirement, especially if they have family or personal ties to Australia.
What are the challenges of non resident mortgages?
Non resident mortgages can also pose some challenges for foreign investors and expats, such as:
- Higher costs and fees: Non resident mortgages can have higher interest rates, fees, and charges than Australian resident mortgages, due to the perceived higher risk and lower competition among lenders.
- Stricter lending criteria: Non resident mortgages can have stricter lending criteria than Australian resident mortgages, such as lower loan-to-value ratios (LVRs), higher minimum deposits, and more documentation requirements.
- Regulatory and tax implications: Non resident mortgages can have regulatory and tax implications for foreign investors and expats, such as FIRB approval, stamp duty surcharge, withholding tax, and capital gains tax.
How to apply for non resident mortgages?
Applying for non resident mortgages can be a complex and time-consuming process, especially for foreign investors and expats who are not familiar with the Australian property market and banking system. Therefore, it is advisable to seek professional advice and assistance from a qualified mortgage broker who specialises in non resident mortgages. A mortgage broker can help you:
- Find the best lender and loan product for your needs and situation
- Negotiate the best interest rate and terms for your loan
- Prepare and submit your loan application and supporting documents
- Liaise with the lender, solicitor, valuer, and other parties involved in the loan process
- Manage the settlement and post-settlement process
If you are interested in applying for a non resident mortgage in Australia, contact us today and we will connect you with a trusted and experienced mortgage broker who can help you achieve your property goals.
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