Home loans for temporary residents of Australia

Can temporary residents get a home loan in Australia?

It is definitely harder for temporary visa holders to qualify for home loans in Australia. But it's not impossible. While your success getting a loan approved depends on a range of individual factors, here are some general guidelines to keep in mind:

• You may need permission from the Foreign Investment Review Board (FIRB) and pay a fee. If you're planning to buy residential property you can apply through the ATO.
• You should be able to apply for a standard home loan, but most temporary visa holders can only borrow up to 80% of a property's value.
• If you are buying a home with an Australian citizen or permanent resident you can avoid FIRB approval and will have an easier time getting the loan approved.
• Having stable income and a history of savings will boost your chances of approval.

You should also note that Australian lenders have their own criteria when lending to temporary residents. Some lenders may not consider your application at all. One way to find out what loans may be available to you if you're a temporary resident is by talking to a mortgage broker before applying.

Which temporary visa types are eligible for an Australian home loan?

There is no specific list of temporary visas that allow you to get a home loan. You could get approval for a loan while on a temporary skill shortage visa (subclass 482), a working holiday visa (subclass 417) or even a student visa (subclass 500). It all depends on the lender and your circumstances.

But Australian lenders will take your visa type into consideration when assessing your application. You'll have an easier time getting approved if you are on a spousal or partner visa with a pathway to permanent residency.

Can I get a first home owner grant or stamp duty exemption?

In most circumstances a temporary resident buying property by themselves won't qualify for a state/territory first home owner grant, stamp duty exemption or federal home buyer scheme. This is because such grants and policies almost always specify that at least one buyer must be an Australian citizen or permanent resident.

Even Australian permanent residents don't qualify for several federal home buying schemes.

Temporary residents can only get a first home owner grant or stamp duty discount if buying with an Australian citizen or permanent resident. You and the person buying will need to meet other criteria (buying a home to live in, haven't owned property in Australia before).

Should I wait until I'm a permanent resident?

If you have a pathway to permanent residency, then you might have a much easier chance getting approval once you have your permanent residency approved. You need to weigh the potential cost and hassle of getting FIRB approval versus waiting until your permanent residency is approved.

If you're desperate to buy a property right now and can't wait for the visa to be processed, you might feel it's worth applying on a temporary or bridging visa.

What home loans are available to temporary residents in Australia?

If you are able to get approval, you'll find that you can get the same home loan products as other borrowers. The biggest restrictions may be around the amount you can borrow and your deposit size.

So just like other borrowers, you can look at:

• Variable rate home loans. Your interest rate can change at any time. Variable rate mortgages usually have fewer fees and are much easier to refinance if you want to get a new loan.
• Fixed rate home loans. You lock in a specified interest rate for a period of time, usually between 1 and 5 years. With a fixed rate home loan your rate won't change, but you have less flexibility in repaying the loan earlier and there are higher costs for refinancing the loan.
• Loans with offset accounts. Some home loans come with 100% offset accounts. This useful feature lets you save money in a bank account that offsets your loan principal. This reduces the interest you pay.
• Package home loans. Some lenders let you combine a home loan with a bank account, a credit card or other financial products. This is called a home loan package. You have to pay an annual fee of around $400 with this type of loan.

How to improve your chances of getting a home loan as a temporary resident

• Have evidence of income. When preparing to apply for a temporary resident home loan, gather as much information pertaining to your employment as possible. Providing proof that you have been employed with the same company for over 2 years could allow you to borrow up to 10% more of the property's value.
• Show proof of savings. You will generally need to save a 20% home loan deposit, to get a home loan with a loan to value ratio (LVR) of 80%. The greater the deposit you save, the better your chance of gaining approval.
• Be prepared for extra costs. In addition to preparing your employment history, have funds set aside for extra costs when you purchase the house.

More questions about home loans for temporary visa holders

• Will my interest rate be higher as a temporary visa holder?

  Interest rates offered to temporary visa holders are generally at the same rate as those for citizens and permanent residents.

• Can I get a home loan on a 491 visa?

  The 491 visa is for skilled workers in regional areas and permits the holder to stay for up to 5 years. It also has a pathway to permanent residency. While every lender has different criteria, it is possible to get a mortgage on a 491 visa.

• Can I get a home loan on a 790 visa?

  The 790 visa is for asylum seekers who arrived without a visa. On this visa you can work and study, in regional Australia. There are no specific rules that mean you can't qualify for a mortgage with this visa. But it's always worth checking if a lender accepts borrowers on your visa type before submitting an application.

Written by

Richard Whitten

Editor

Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full bio

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Richard has written 557 Finder guides across topics including:

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