If you live and/or work in Australia, you may find it frustratingly difficult to get a mortgage from a high street lender.
However, there are specialist lenders that will look at your application if you speak to a broker that can find them.
Why is it so difficult?
Since 2014, mortgage regulations have become increasingly restrictive to prevent a recurrence of the 2008 credit crunch, effecting all borrowers.
Banks have become more cautious in their lending to avoid breaching new rules set out by the Bank of England, Prudential Regulation Authority and Financial Conduct Authority.
Why is Australia such an issue?
Transactions if you’re living in Australia can be difficult as there is an inter-governmental treaty that prevents lending to each other in place.
Despite this, there is still a limited number of lenders that can look at your application.
With the volatile currency exchange rates, lenders hesitate to lend to anyone that gets paid in something other than pound sterling.
Each lender is different but it’s likely that, when looking at your mortgage application, instead of using the current exchange rate, they will use the average rate seen over the last few years.
The type of property that you’re looking at purchasing will determine a key part of your lender’s assessment of your application.
For example, properties that you intend on using as a holiday let may be classed as a House in Multiple Occupation (HMO), which will mean that the lender will want to know how you plan on managing this from abroad.
If you work for a multi-national company and have an income equivalent to £40-50k and over, then you will stand in a better position to have your application accepted.
And if I don’t?
You could still be accepted as smaller employers are certainly acceptable. If you’re self-employed, you will need to provide 3 years’ accounts.
Smaller employers are certainly acceptable to many banks and building societies, and some even have no minimum income requirements.
How much can I borrow?
Unlike a normal residential mortgage, you can usually borrow between 4-5x your income, depending on the lender and your application.
If you’re looking at getting a buy-to-let mortgage, then you will need the rental income to cover at least 125% of the mortgage repayment amount at a typical rate of 5.5%.
How do I apply?
It’s a complicated process, but there are many options for you if you’re living in Australia.
For further information on how you can get a mortgage in the UK whilst living in Australia, speak to one of our expert advisers who will be able to walk you through your next steps.