Australian expat home loans, and how lenders assess them

The short answer

You can borrow against Australian property while living overseas, from the lenders that write expat business. Your income is assessed in its own currency and generally discounted, and your identification has to be certified to the lender's satisfaction from where you are.

That is one worry off the list for most expats reading this. It is not advice about your tax position, which is a separate question for your accountant.

Why the lender pool is narrower

Not every lender wants a borrower it cannot easily verify, paid in a currency it does not deal in, in a country whose employment documents it does not recognise. Some decline expat business outright, and others accept it with conditions.

• Which currencies a lender will accept income in, which varies considerably
• Whether your country of residence is on the lender's acceptable list
• Whether you are employed by a multinational, a local employer or self-employed
• How much of the loan the lender will advance to a non-resident borrower
• Whether the lender will write a new loan, or only hold one you already have

With fewer lenders in the market, choosing the wrong one first costs more than it does onshore. There are fewer second chances, and each application leaves a mark on your credit file.

How foreign income is assessed

Lenders convert your income to Australian dollars and then generally apply a discount to it. The discount exists because exchange rates move, and the lender is sizing a loan that will be repaid for decades.

How much is discounted, and which currencies are accepted at all, varies by lender. Allowances, housing benefits and bonuses common in expat packages are treated inconsistently, and some lenders exclude them entirely.

Your evidence has to travel too. Payslips, an employment contract and often a tax document from your country of residence are the usual set, and lenders differ on what they will accept in place of what they cannot read.

The paperwork, from a different time zone

The extra steps are administrative rather than difficult, but they take time and they are worth starting early.

• Certified copies of your identification, prepared in the way the lender specifies for overseas applicants
• Employment evidence in a form an Australian assessor can read, translated where necessary
• Bank statements from your overseas accounts, as well as any Australian ones you still hold
• Arrangements for signing loan documents from overseas, which the lender will set out
• A power of attorney in some cases, particularly where settlement timing is tight

Time zones are the quiet cost of an expat file. Somebody has to be awake in Perth chasing the lender while you are asleep, and that is a large part of what a broker is doing on this kind of loan.

Keeping your position strong while you are away

The easiest expat files belong to people who did not disappear from the Australian system when they left. A few habits make a real difference later.

• Keep an Australian bank account open and used, rather than closing everything on the way out
• Keep any existing Australian credit facility in good standing
• Keep your Australian address details current with your existing lenders
• Review an existing Australian loan occasionally, because rates drift while nobody is watching
• Keep records of your overseas income and employment as you go, not at application time

An expat with an active Australian footprint is a much easier file than one who has been invisible for a decade. That is worth knowing on the way out, not on the way back.

Coming home

Moving back changes your position, and mostly for the better. Once you are resident again with Australian income, the whole lender panel is available to you.

The awkward window is the one in between. Many lenders want an Australian employment contract and some want payslips before they will assess you on the new income, so the timing of a purchase around a move deserves planning.

Start the conversation before you resign rather than after you land. An expat loan written on the way home can often be reviewed once you are settled, and knowing that in advance changes what you take now.

Where to go next on this site

The general guides apply to you as much as to anybody buying onshore. The borrowing power guide is the one to read first.