Alfred Moller

Many expats first contact their bank directly, only to be told it can’t be done. Often this creates an assumption that if their bank does not lend to expats, then no bank does.

• Alfred Moller from Omniwealth disagrees and suggests that expats work through the following points before applying for a loan:
• Lending policies can differ greatly between each other, even the Big 4 banks
• LVR’s can range from 60-90% inclusive of Lenders Mortgage Insurance (LMI)
• Due to the associated exchange rate risk, only 50-80% of foreign denominated income is accepted
• Boutique lenders have the most flexible expat policy with some considering self-employed income. There tends to be a 1% risk fee associated with the lender with many restrictions.
• Interest rates can vary from 4.5%-7% depending on the applicants requirements
• Lenders may still consider the minimum Household Expenditure Measure (HEM) for living expenses, even if your employer covers all your costs. This is a common mistake from brokers which can result in an unpleasant experience.
• Title ownership must be carefully considered when an expat and a non-Australian citizen partner wants to buy a property. Implications such as foreign purchaser’s duty, land tax surcharge and FIRB approval are common issues for non-residents.

More hurdles for expats buying local property

“It is not always beneficial for an expat/non-resident to apply for an investment loan as not all brokers understand the long-term implications.

“It is highly recommended that expats seek tax advice within their local tax jurisdiction and Australia before making an approach for funding,” said Alfred Moller, Omniwealth.

By Alfred Moller, Expat Lending Specialist

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