Home loan while on a spouse visa

2010 December 20

Have you just helped your partner to migrate to Australia? Unlike most couples, you may have trouble buying your first home together because lenders have restrictions on lending to temporary residents.

However it is possible to successfully get approved for a home loan from a major lender, if you use the services of a mortgage broker who specialises in spouse visa mortgages. They can help you to apply with a lender that accepts temporary Australian residents, and can present your application in a way that highlights your strengths and mitigates the risk associated with your visa status.

There are several types of partner visas that are acceptable for the purposes of a home loan application. In most cases, the application is for an Australian Citizen or Australian Permanent Resident and their spouse on a Spouse Visa Subclass 820. Subclass 309 visas are acceptable only if the couple has now moved to Australia and is buying a property to live in, not an investment property.

Same sex couples on Interdependency visas subclass 310 & 826 are also acceptable, however they are less common. Note that in Australia it is illegal for a lender to discriminate against a borrower because they are in a same sex relationship, so you can expect fair treatment when applying for your mortgage.

The differences between the guidelines for Australian lenders comes from their differing risk appetites and their differing views of the risks associated with temporary residents. The statistics show that couples on a subclass 820 visa, in particular couples with children, are very likely to remain in Australia and to pay their home loan on time. However despite this track record of performance many lenders still do not accept this type of applicant.

While most banks will decline your loan outright, there are some lenders that can consider lending up to 90% or even 95% of the purchase price of the property that you are buying.

If you need help applying for your home loan then why not talk to a mortgage broker who specialises in non resident home loans? They can quickly work out if you meet the lending criteria of any Australian lenders and can then help you choose which bank has the mortgage that suits your situation.

A low interest rate is important, however the features of the loan such as redraw, extra repayments, offset accounts and internet banking can make the loan easier to manage & save you interest in the long run. A good mortgage broker will analyse your needs & help you to create a short list of loan features that you need.

This is particularly important for borrowers who have moved to Australia from overseas. Mortgages are quite different in the UK and USA where basic mortgages & fixed rate loans are more popular. Borrowers in Australia tend to prefer 100% offset mortgages & variable rate loans which are similar to the USA’s Adjustable Rate Mortgages (ARMs).

Variable rate loans in Australia are linked to the Reserve Bank of Australia (RBA)’s overnight cash rate plus a margin. This is the same concept as the London Interbank Offered Rate (LIBOR) which is used by many international lenders. Make sure you apply with a reputable lender as Australian banks are allowed to change their margin above the RBA’s cash rate.

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