Expat loans: How to buy a house in Australia if you’re living overseas

In contrast, foreigners face more stringent rules than expats and require approval of the Foreign Investment Review Board before they can buy residential property in Australia.

A two-year ban in force from 1 April 2025 prevents foreigners from purchasing established dwellings in Australia, unless an exemption applies.

How to buy a house in Australia if you’re living overseas. Picture: Getty

Here’s some tips to help you understand the process for expat loans:

Can an Australian living overseas get a mortgage?

Australians living and working overseas can obtain a home loan in Australia, and these days more lenders are offering expat home loans.

However, each bank will have its own restrictions when it comes to borrowing rules.

The big four banks each offer some variation of expat loans. Non-bank lenders are also stepping in with flexible financing solutions. Smaller banks tend to have tighter policies and won’t generally offer expat loans.

As each bank has its own lending criteria, it’s important to find the option that best helps you achieve your goals.

How do expat loans work? 

When it comes to assessing expat borrowers, each bank has its own policy on what it likes to do. 

Some lenders may only accept loan applications from expats earning foreign income in certain countries. Certain lenders may also only accept expat loans for properties in specific postcodes.

The usual home loan options such as refinancing or cash out may not be available for an expat loan.

What are the differences between expat loans and loans for someone still living in Australia?

Lending criteria for expat borrowers are generally stricter than for ordinary residents. 

The amount an expat can borrow for a mortgage will depend on their personal situation as each bank will have its own criteria.

For example, Bank A may accept a maximum loan-to-value ratio (LVR) of 70% when dealing with foreign income, while Bank B will limit LVR to 80% for certain foreign currencies. The LVR is the total amount borrowed as a percentage of the property value and it is used by lenders to determine a borrower’s risk. 

Most banks generally lend around 70 - 80% LVR of the property’s value for an expat mortgage. However some lenders allow a maximum LVR of up to 90 - 95%.

Also be aware that lenders might shade your foreign income, which could limit your borrowing power. 

For example, if you are an Australian living in Australia full time and earning $100,000 a year, a lender will consider 100% of that income to assess whether you qualify for a loan.

However, for an Australian abroad earning the same amount in foreign currency, the lender may only accept 80% of that income to account for currency fluctuations.

Where an expat is earning income in Australian dollars, the normal LVRs may apply and mortgage insurance could also be available.

How much deposit do you need for an expat loan? 

The deposit needed for an expat loan depends on the lender but as a ballpark aim for at least 20% plus costs. 

What happens if my partner is a foreign resident?

If your partner is not an Australian citizen, most lenders will not allow them to be a co-borrower.

If your partner is classed a “foreign person” under the Foreign Investment Review Board regulations, they may require approval to buy residential property in Australia.

What currencies are more likely to be accepted by Australian lenders?

Banks generally prefer to accept the top most traded currencies from expat loan applicants.

These include: US dollars, British pounds, Euros, Canadian dollars, Hong Kong dollars, Japanese yen, and New Zealand dollars and Singapore dollars.

The larger banks will likely accept more currencies.

For example, at Commonwealth Bank normal LVRs apply for borrowers earning income in Australian dollars or currencies such as British Pounds, Euro, Hong Kong Dollars, New Zealand dollars, Singapore dollars, US dollars and Canadian dollars.

However, LVR is limited to 80% for applicants earning Japanese Yen, Indian Rupee, Indonesian Rupiah, Vietnamese Dong and Chinese Renminbi. The CBA does not accept any other foreign currency incomes.

What documents do I need?

Like for all loans, lenders want to see documents that verify your identity, income, debts and expenses.

Generally they will require at least two pay slips and proof of bank statements from the last three to six months showing your salary being credited.

Lenders may also ask to see your current employment contract to confirm your borrowing power.

A copy of your visa permitting you to work in the country you are currently living in will also be sought, along with a copy of your passport and Australian Drivers Licence.

When it comes to credit checks, Australian banks only check your credit score in Australia.

What else do I need to consider?

Australian expats seeking to buy on home soil should seek financial advice to consider the tax implications of their purchase.

There are loopholes and complexities involved in seeking an expat loan, but a broker can help research every possible option as each individual situation is different.