National average property price
AUS$658,608 (Australian Property Monitors, May 2015)
Basic Mortgage Facts
Max 80% loan to value for non-Australians, and up to 95% loan to value for Australian citizens Max term 30 years AUD $100,000 minimum loan
Rates from 4%
A traveller’s dream, Australia captures the imagination. The largest island in the world, its unusual landscape is one astonishing contrast after another. From the smouldering hot outback to snowfields the size of Switzerland, tropical rainforests to golden beaches and exotic coral reefs, huge grazing lands to major cities. Everything about this extraordinary country is larger than life, including the Australians who live up to their straight talking, fun loving reputation. The temptation to join them in their sun baked, barbeque on the beach lifestyle is proving irresistible to many.
So much so that the country has claimed the top spot in the most recent Quality of Life Index from NatWest International Personal Banking, with eight in ten British expats in Australia citing the better environment and quality of life for their children as the number one reason for moving there. And more than eight in 10 said that the Australian sunshine was one of their top five reasons for living there, with 87 per cent saying they would remain indefinitely. Australian housing is among the most expensive in the world, but there are, of course, local house price variations, with Sydney and Melbourne experiencing the biggest annual price increases. Some believe that the housing market is overvalued, but the pace of price rises is starting to slow. Growth in housing values slowed in the three months to April 2015, from the previous quarter and from a year ago, according to the latest CoreLogic RP Data figures.
Eligibility criteria for mortgages in Australia are generally quite good, and you can still borrow up to 80 per cent of the value of a property if you’re not an Australian national, and the minimum loan is AUD $100,000. Rates currently start from 4 per cent and lenders will use affordability calculators, which can differ from one institution to another, so maximum borrowing amounts can vary significantly. Many will use a debt coverage ratio that takes into account anticipated monthly capital repayments on all mortgages, so that the sum total of all mortgage and personal loan commitments does not exceed 50 per cent of your net monthly income. As always, it’s imperative to take professional advice before making any decisions. Prospective buyers should always go through the same process that they would follow if they were buying a property in the UK, and this includes consulting a good independent lawyer, and ensuring that an independent valuation of the property takes place, even if it’s a cash purchase. There’s nothing to be gained, and everything to lose, by cutting corners and taking unnecessary risks.
One of the most effective ways of obtaining a mortgage for a property purchase in Australia is to use a specialist broker in the UK. They’ll know the exact mortgage application requirements and can source the best possible deal. They can also put buyers in touch with specialists in Australia, to assist them with legal and planning issues, and can also assist with currency exchange.