Many temporary residents are advised that their maximum loan is 80% of the purchase price. In some cases, higher lending ratios are available depending on visa type and borrower structure.
Temporary resident migrants may be able to borrow up to 95% LVR at normal bank interest rates where they are purchasing with their Australian citizen or permanent resident partner or spouse.
If you are purchasing with an Australian citizen or permanent resident and you hold either a subclass 457, 300, 309, 820, Bridging Visa A or B, 461 visa, or any other visa that permits you to work in Australia (excluding tourist visas), standard lending policy applies, and 95% is available.
When purchasing with an Australian citizen or permanent resident, a 5% deposit plus purchase costs is required.
Subclass 457, 475, 487 and 495 visa holders living and working in Australia may borrow up to 90% of the purchase price with a small number of lenders.
Foreign citizens moving to Australia on a working visa valid for 4 years (such as a subclass 457 or 422 visa) may borrow up to 80% of the purchase price.
Student visa holders will be limited to 80% of the purchase price for their Australian home purchase.
Bridging Visa A or B holders can be approved with only a 20% deposit.
This is not an exhaustive list and most other types of visas that permit the migrant to work in Australia will be accepted with a 20% deposit.
| Borrower Type | Max Home Loan Lending |
|---|---|
| Australian citizen buying with their temporary resident foreign spouse or partner (married or defacto) | 95% + LMI |
| Australian permanent resident (including NZ Citizens) purchasing with their temporary resident partner / spouse | 95% + LMI |
| Non resident living in Australia on a subclass 457, 475, 487 or 495 visa without permanent resident | 90% |
| NZ citizen living in NZ purchasing Australian investment property | 90% |
| Foreign citizen moving to Australia on a working visa valid for 4 years (such as a subclass 457 or 422 visa) | 80% |
Minimum deposits for migrants on temporary provisional visas vary depending on the visa subclass and occupation. Some banks and non-bank lenders consider certain visa holders a satisfactory lending risk given that permanent residency is likely to be achieved and the occupation is in demand or there is a stable employment history.
| Visa Type | Lending Ratio / Minimum Deposit |
|---|---|
| Subclass 457 | Up to 90% of the purchase price (as small as a 10% deposit) |
| Subclass 487 | As small as a 10% deposit |
| Skilled Graduate 487 | Only a 10% deposit |
| Skilled Regional 495 | Up to 90% of the purchase price |
| Bridging Visa A or B | Approved with only a 20% deposit |
| Student Visa | Limited to 80% of the purchase price |
| Other work visas (not exhaustive) | Generally accepted with a 20% deposit |
If purchasing with an Australian citizen or permanent resident, disregard the above and note that only a 5% deposit plus purchasing costs is required in this scenario.
Contributing 20% plus purchasing costs may not be possible for many. Borrowing at 80% may also leave limited funds in case of an emergency.
The 95% structure may not be suitable, but an LVR of 85% to 90% may make a significant difference. LMI works on a sliding scale, so the bigger your deposit, the lower the LVR, and the cheaper the LMI premium will be.
Please note the figures below are estimates only.
| Financial Details | Standard 80% | Option 95% |
|---|---|---|
| Purchase Price | 400,000 | 400,000 |
| Estimate of Fees (NSW) | ||
| Lender Fees (e.g. application, settlement excl LMI) | 150 | 150 |
| Government Charges (Registration & Stamp Duty) | 13,775 | 13,775 |
| Miscellaneous (e.g. build/pest & Solicitor) | 2,000 | 2,000 |
| Lenders Mortgage Insurance (LMI) | - | 10,500 |
| Subtotal Fees & Charges | 15,925 | 26,425 |
| Purchase Price + Fees | 415,925 | 426,425 |
| Home Loan Structure | ||
| Proportion of Home Loan towards Purchase | 320,000 | 377,500 |
| Proportion of Home Loan towards LMI | - | 10,500 |
| Home Loan Total | 320,000 | 388,000 |
| First Home Owners Grant (FHOG) $7000 if applicable | - | - |
| Own Funds Required | 95,925 | 38,425 |
| Interest Rates and Repayments | ||
| Loan Current Interest Rate example (Variable) | 6.69% p.a. (comp rate 6.83%) | 6.69% p.a. (comp rate 6.83%) |
| Loan Monthly Repayments P&I (Variable) + Fees | $2,060 | $2,498 |
FIRB approval will generally be required before migrants who do not hold permanent residency can commit to buying a home in Australia. FIRB approval is generally only a technicality, provided you are buying the home to live in, not as an investment property to rent out.
