British and Australian property markets continue to present an attractive prospect for overseas investors. And yet, increasing regulation over lending practices is making it ever more challenging to access finance, particularly UK mortgages for expats in Australia and vice versa.

This is because of a treaty between the UK and Australia that places further limits on the ability of banks in each country to lend to residents in the other. While it’s not impossible to secure loans for British or Australian property as an expat in either country, it can prove challenging without the right support.

To minimise the obstacles to financial approval, here are some of the key things to consider:

Existing mortgages

Restrictions around lending mean that many UK and Australian banks are unwilling to provide finance to first-time buyers, instead opting for more experienced borrowers who are able to evidence a low risk profile over 12 months or more. As such, it may work in your favour if you already have a mortgage in your country of residence at the time of application.

However, bear in mind that if you need to refinance property in Australia in order to secure a mortgage for a UK property purchase, or vice versa, you will need to secure approval from lenders in both countries. This can make the process a lot more convoluted unless you have a broker who is capable at dealing with both markets.

Income, property and rental valueAustralian & UK Mortgages For Expats: What You Need To Consider

Affordability is a core focus of underwriters in both the UK and Australia. To ensure the best possible chance of financial approval, it’s essential to ensure that you keep an eye on the loan ratio and either your income or the projected rental income of your property.

Nowadays, most lenders will provide a maximum loan of around 60-70% of the property value for overseas borrowers. If you’re a BTL investor, they will also look at the rental income ratio; this should be at least 125% to satisfy concerns around whether you can afford interest rate payments. For residential mortgages, you can usually borrow up to 4.5 times your income, which will be factored against exchange rates.

With this in mind, it’s prudent to look at the numbers before setting your sights on a particular property. Those outside of these criteria are unlikely to secure finance when applying for a mortgage in the UK or Australia as a non-resident.

Lending options

Tightened regulations undoubtedly have an impact on choice. Whether you’re seeking buy-to-let mortgages for foreign nationals, or you’re looking to move to the UK or Australia with a residential mortgage, it can be tricky to determine firstly which banks lend to overseas investors, and secondly what the criteria are.

That’s where an independent mortgage broker can prove invaluable. Specialists in mortgage finance solutions for the UK and Australia, like Liquid Expat Mortgages, can help you get your head around complex legislation in both countries. We have the largest specialist lender panel for expats and overseas investors, giving you access to over 35 lenders.

As establishment costs and interest rates are typically higher for non-residents, we can also ensure that you secure the best deals with trusted lenders. For complex cases, the support of our specialists can even flag up alternative options, such as bridging finance.

Ready to explore UK and Australian finance options in more detail? Find a mortgage that works for you with Liquid Expat today. For more information, visit our dedicated page or call our 24/7 hotline on +44(0)161 871 1216

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