Non residents – Finance

Some international investors are able to use their local lenders and those lenders will use the Australian property as security. However, many investors require a loan from an Australian lender.

Property finance for overseas investors is readily available in Australia from Australia’s major banks.

Interest Rates and types of loans:
In general the interest rates and type of accounts are the same for foreign investors as are available for local borrowers.

Maximum borrowing Capacity:
The key difference is the amount that funders will lend to overseas borrowers as a percentage of the value of the security. In general terms lenders will lend to a maximum 70% (some may go as high as 80%) of the value of the security to overseas lenders. As a general rule apartments must have an internal size greater than 50sqm to be able to borrow to the maximum amount.

As is the case with local borrowers, all loans are subject to meeting the various banks lending criterias, borrowers need to demonstrate an ability to service the loan and of course an estimate for rental income from the investment property to be purchased is included in this calculation.

Loan Structure:
Generally loans can be written for up to 30 years and are available on an interest only basis for up to the first 5 to 10 years.
Loans can be taken out at the current variable interest rate and will adjust upwards & downwards with the market, over the term of the loan. Or they can be taken out on a fixed rate over a set term from 6 months to 10 years. At the end of this term they usually automatically revert to the current variable rate at the time, or can be fixed again at the current fixed rate.|

Mortgage Brokers:
Loans can be organised directly with the lending institutes or through a Mortgage Broker. Mortgage brokers typically access many bank and non bank lenders. The mortgage broking service ensures that you are able to select the best loan from a range of lenders. As is common practice in Australia, mortgage brokers are paid a fee by the lender and as such they do not charge a fee to the investor for organising finance. Typically the finance fees paid by the investor to their selected finance provider are the same fees and interest rates that they would pay had they organised the loan direct with the loan provider.

Preferred Mortgage Broker Details:
Home Port Property works closely with Shire First Mortgages, an organisation which offers a mortgage broking service, working with over 20 of Australia ’s major bank and non bank lenders. Many of these lenders offer loan products for overseas investors and Shire First Mortgages is well equipped to find an appropriate loan product to suit the needs of overseas investor’s from these lenders.

This is a free service as Shire First Mortgages are paid by the lenders. Your fees and interest rates are the same on each product from the various lenders regardless of whether your loan has been organised directly with the lender or with the help of Shire First Mortgages.

If you have any mortgage finance queries, please feel free to contact Susanne Massingham, principal of Shire First Mortgages, directly:

Susanne’s email is:  suem@shirefirstmortgages.com.au  
Phone: +61(0)2 9531 7503
Fax:  +61(0)2 9531 7628
Website: www.shirefirstmortgages.com.au

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