Property and Mortgages in Australia

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Property and Mortgages in Australia

If you need a mortgage to purchase a property in Australia, then Mortgages.co.uk may be able to help. We can give you access to a team of licensed credit brokers with over 20 years experience.

Read our complete guide to mortgages in Austrailia.

By using the property you wish to buy in Australia as security, you could raise a repayment mortgage, depending on your circumstances.

Based upon the valuation or purchase price (whichever is lower), UK or Non-UK mortgage applicants can borrow up to 75% in Sterling or up to 80% in Australian dollars for purchase only. When it comes to re-mortgages for whatever purpose, cases are dealt with on an individual basis.

There is a minimum loan of £50,000, that has a repayment period of 5-30 years (in Australian Dollars), and can be available up to the age of 75. Current interest rates as at 1 st February 2008 are from around 8.77% variable in Australian Dollars or around 7.06% in Sterling. Fixed rate loans are also available, some with an initially lower interest rate.

The example below demonstrates a repayment mortgage in Australian Dollars. The cost of a mortgage protection policy has not been taken into account.

How much can I borrow & what proof of income is required?

There are no non-status/self-certification mortgage facilities available in Australia , therefore all loans need to be supported by a minimum of, proof of income. If you are employed, you will need to produce; your last three months payslips, P60/employers reference and your last 6 months Personal bank statements. If you are self-employed you will need; copies of your Audited Accounts together with your last 12 months business, and 6 months personal bank statements.

Lenders in Australia will only take into account approximately 70% of any proposed rental income that you could earn on your property, whilst considering the cost of mortgage repayments.

Your loan will be based on your personal (or joint) 'gross' pay, and is calculated on an affordability basis. For you to be considered by the lenders in Australia ; your total out-goings must not exceed 35% of your gross monthly income.

A simple example; if your total gross monthly income is £2,000, your total out-goings must not exceed £700: you must have £1,300 per month for personal spending to be considered.

Notes for purchasing a property in Australia

• Before purchasing a property in Australia you must locate the property you wish to buy, then apply to the Foreign Investment Review Board (FIRB) for approval. All non-Australian nationals must go through this process on all types of property.

• To obtain approval via the FIRB visit; www.firb.gov.au where you can obtain the relevant application forms, once completed these must be faxed to the board on; 00 612 6263 2940, or posted to:
  
  The Executive Member
  Foreign Investment Review Board
  The Treasury
  Langton Crescent
  PARKES ACT 2600
  Australia
  
  
• Whilst you are waiting on the decision from the FIRB, you can apply for an 'agreement in principle' from the lender.
• Once approval has been granted, enter into the contract with the lender to purchase the property, ensuring that you obtain a suitable finance.
• Due to the Australian legal and administrative system, there may be slight delays on securing your loan, despite the fact that all reasonable steps will be taken to avoid this. So be prepared.
• Make sure you have researched every possible cost that you may incur, whilst purchasing a property in Australia . Note, you may be charged by the government in addition to the lenders legal costs (the Lenders costs however are usually specified when the Lender offers you the mortgage).
• Unless you are very experienced in purchasing abroad, it is very important that you seek some sort of legal advice before signing the contract for a property or paying a deposit. The Lender will require a copy of these signed documents together with an application form, however you will be able to sign these documents 'subject to mortgage finance', once the contract is signed it is legally binding, so if you do not state this and the Lender does not wish to do business with you, this could be a huge problem.
• Legal advice may be costly, so ensure that you receive a complete quote, incorporating all costs, before applying for a loan.
• An Australian bank account will be required.
• Loans are available in Australian Dollars only.
• It is advisable that a life assurance policy is set up on all mortgages.
• Properties in Australia can be purchased by an individual or in joint names.