Can I get Home Loan on a temporary visa in Australia?
When it comes to buying a property there are different rules for people living in Australia on a temporary visa. We’ve created a short guide on what the conditions are.
Can I get a home loan if I’m on a temporary visa?
Yes. Subject to meeting certain criteria, you can get a home loan while living as a temporary resident. You are more likely to be approved if you have at least 12 months left on your visa, have a stable employment and income history plus a history of genuine savings. Your borrowing capacity will be lower than permanent residents and citizens, with a maximum of 80% of the property’s value and before buying property you will need to apply to the Foreign Investment Review Board (FIRB).
What is the Foreign Investment Review Board (FIRB)?
The Foreign Investment Review Board (FIRB) regulates foreign investments into Australia and has the ability to approve or decline applications to investment. To apply for approval to buy residential or commercial property you will need to pay through the Australian Tax Office website and pay a fee.
Do banks and other lenders care what visa I’m on?
Yes. The visa that you are on makes a difference to whether or not you can obtain a home loan. If you are unsure which visa holders qualify for home loans get in touch with us so we can advise you. Lenders will only lend up to 90% of the home value to temporary visa holders unless you are applying for a joint loan with an Australian citizen or permanent resident and then you can borrow up to 95% of the property value.
How much can I borrow?
Typically if you are on a temporary visa you can only borrow 80-90% of the property value. That increases to 95% if you are applying with a permanent resident or Australian citizen.
Are you on a spousal visa?
Banks and other lenders are more willing to lend to temporary visa holders who are either married or in a relationship with an Australian citizen, NZ citizen or an Australian Permanent Resident. This is because they see you as a lower risk so the lender may process your application as though you were an Australian citizen.
Are you on a significant investor visa?
When you’re on a significant investor visa you can live in Australia for up to four years and there is a permanent visa pathway available. The effect is that negotiations with lenders are much easier. Most lenders only consider Australian income, however some lenders have a requirement that your income is only that which is generated within Australia. That requirement may be waived by some lenders so you can more easily qualify for a home loan.
Are you on a student visa?
If you are on a student visa you can take out a home loan. Students are not restricted from buying property however will still need to apply to the FIRB for approval. If you do not have an income then your parents may be able to buy the property for you subject to meeting criteria.
Do I need government approval?
Yes. You will need to get permission from the Foreign Investment Review Board and pay the required fee.
Do I qualify for a First Home Grant?
In the majority of situations temporary residents do not qualify for state/territory or federal first home owner grants or stamp duty exemptions. Those schemes are only for permanent residents, Australian citizens or spouses of Australian Citizens or permanent residents.
What if I have a foreign income?
If you have foreign income then lenders will only take into account a portion of your income. They will assess 60 – 90% of your foreign income because of exchange rates, so you will need to earn some income from Australia. If you are in a good financial position then a lender may consider 100% of your income which means the home loan you get will have better conditions attached. Banks prefer currency from certain countries such as Europe, America, New Zealand, Singapore amongst others.
Should I buy now or wait until I’m a permanent resident?
If you are planning to buy a property by yourself then it is best to wait until you are a permanent resident or citizen because you will be eligible for more benefits such as reduced stamp duty and first home owner grants.
You won’t have to apply to the FIRB so you will save money on the application fee.
You will also avoid the foreign owner stamp duty surcharge.
If you buy with an Australian citizen or permanent resident then you will be treated as if you are a permanent resident. Generally lenders prefer that the Australian citizen or permanent resident holder is the highest income earner.
Lenders will also favour you more if you’ve been in a long term relationship with an Australian citizen or permanent resident because they see you as a lower risk because your ties to Australia will be stronger. Being a lower risk means that you may qualify with more lenders and pay a lower interest rate, which could save you thousands of dollars. You’ll also be eligible to borrow up to 95% of the home’s value.
What’s the next step?
We are specialised mortgage brokers and can assist you with buying property if you’re on a temporary resident visa. We have relationships with banks and other non-bank lenders so we will negotiate the best deal with you before you find the property of your dreams. When you’re on a temporary visa you are eligible for the same loans as other borrowers, so you can apply for variable rate home loans, fixed rate home loans, loans with offset accounts and package home loans. You can contact Nice Homes Loans Mortgage Broker for your home loan on 0731142281 or docs@niceloans.com.au
