Yes, if your client is a foreigner, they can receive a home loan. However, they may come with higher interest rates, and the process may be more challenging. In general, the lending guidelines for foreign borrowers is as follows:
- Foreigners can borrow 70% of the purchase price with interest rates between 6.5 and 8%.
- Foreigners can borrow 55% at interest rates below 5% if they have a high net worth and earn income in one of the acceptable primary currencies.
- If a foreigner lives in Australia or is married to a citizen, they can have a higher LVR at a lower interest rate.
- Foreigners can secure interest-only loans with a maximum term of 5 years.
- They must earn an income with one of the acceptable currencies.
- Foreigners can apply for construction loans and vacant land loans at higher interest rates.
Items to Note
It is important to note only certain nationalities are allowed to borrow in Australia because of tax legislation. Also, your client will need to seek approval from the Foreign Investment Review Board to buy real estate in Australia, unless they are a citizen of New Zealand or a permanent Australian resident. In addition, New South Wales, Queensland, Victoria, and South Australia apply stamp duty surcharges to foreigners. If your client does not occupy their property or rent it out for at least six months during a year, they will be levied a minimum of $5,000 per year.
If your client is a foreigner seeking to purchase real estate in Australia, consult with the experts at Mortgage Street. Our team specialises in home loans for foreigners and non-residents. We understand the process, know what countries and currencies are accepted, and help make the process easier. We may even be able to provide your client with a more competitive loan than those offered by traditional lenders.