Refinancing an Australian Mortgage
Exfin is typically able to arrange residential home loan finance for Australian expats, but refinancing an existing mortgage when individuals are non-resident can be a more difficult process, with fewer lenders providing access to funds, and more restrictions sometimes applicable.
More Competitive Interest Rates
Reviewing whether refinancing is available can be very advantageous. Most Australian banks compete vigorously only on "new loans" and there is usually a very significant gap between the interest rates payable on new and existing loans. Additionally, while banks may offer lower interest rates to new customers who have significant equity in their homes - these discounts are not passed onto existing customers.
Many expatriates have mortgages which are "ancient" in nature, and these can be markedly uncompetitive in terms of interest rates and terms and conditions - particularly in a sharply rising interest rate environment.
Remember, in most situations no cost attaches to having a mortgage broker review your current arrangements and suggest alternatives. The following represents a snapshot of the market in 2024, and is provided as general guidance only.
Eligibility and Borrowing Limits
Australian lenders will review your eligibility in the normal way, calculating your servicing ability by looking in detail at your income and costs, but there are some restrictions on maximum loan to valuation ratios (LVR) which are driven by the currency in which you earn your income. Please note, however, that Australian banks will not currently lend to self-employed non-residents
| Gold Tier Currencies | Silver Tier Currencies |
|---|---|
| Maximum 90% LVR | Maximum 80% LVR |
| British Pounds (GBP) Euro (EUR) Hong Kong Dollars (HKD) New Zealand Dollars (NZD) Singapore Dollars (SGD) United States Dollars (USD) Canadian Dollars (CAD) | Japanese Yen (JPY) Indian Rupee (INR) Indonesian Rupiah (IDR) Vietnamese Dong (VND) Chinese Renminbi (CNY) United Arab Emirates Dirham (AED) |
Current Indicative Mortgage Rates
At its latest meeting on November 5, 2024 the RBA again retained the cash rate at 4.35% - maintaining the highest rate in nearly 11 years. The rates below represent current indicative mortgage interest rates in November, 2024. The current expectation is that interest rates will not begin to trend down until 2025, particularly given resilience in the employment market and uncertainty over the impact of the Trump election.
| Type of Mortgage | Interest Rate |
|---|---|
| Standard Variable Rate - Owner Occupied (P & I ) | From 6.04% p.a. |
| Standard Variable Rate - Investment (P & I) | From 6.34% p.a. |
| Fixed Rate Home Loan - Investment (P & I) - 5 years | From 6.09% p.a. |
Current analysis suggest that there is little scope for rates to fall during the latter course of 2024 or early 2025, with static levels of inflation presently inadequate for the RBA to initiate interest rate reductions in the short to medium term.
If you would like to make an inquiry regarding an Australian mortgage please complete the Inquiry form below providing details and you will be contacted promptly.
