Non-resident Guide to Refinancing Australia mortgage

If you are a overseas non-resident who have taken an Australia mortgage, this is a must-read. If your interest rate is more than 4% now, you should find out what your refinancing options are.


Ups and lows of Australia lending

Let’s start with a bit of background. Australia property owners that invested in apartments and houses a few years ago may have either experienced a very lenient borrowing environment or extreme hardship during the mortgage application. Indeed, both scenarios sounded starkly different which was exactly what we mortgage brokers experienced.

Tightening of mortgage begun in 2016 and ramped up in 2017. The rules were further stringent for overseas non-resident applicants. The sudden changes by banks and pressure from the Australia authorities of ASIC and APRA took everyone by surprise.

Many borrowers took up investment mortgages from non-bank lenders in Australia and banks in Singapore. Back then, rates were around 4.5% and 3% respectively. Fast forward, majority of their rates would be 4.5% to 7%. This lie the opportunity to refinance to Australia or Singapore.

The strict lending guidelines, weaker-than-expected Australia dollar, record low cash rate in Australia and the loss of appetite of Australia banks towards overseas non-residents created a very limited pool of mortgage options and availability.


I am a non-resident of Australia. What are my refinancing options?

Mortgage financing are offered in Singapore and Australia. Overseas income are accepted.

Singapore banks offer up to 70% lending and rates from 3%. Repayment currency is either in SGD or AUD. Some banks only accept properties in selected suburbs. There are also banks that require a minimum annual income from SGD$100,000. Apartments below internal size of 50 square metres are acceptable.

A notable exclusion is land and construction mortgages are not available. Purchasers should borrow in Australia first. Upon completion of the construction, they may refinance to another bank.

Australia banks offer up to 70% lending and rates from 4+%. Repayment currency is only in AUD. As they are onshore local banks, they will accept residential properties almost anywhere in Australia. Income and debt must pass their serviceability assessment, which differs much from Singapore TDSR framework. They scrutinise your overseas income documentations including credit card spending. Interest-only is available for land and construction, during the building phase. Generally, apartments with internal size of 50 square metres are acceptable.

In addition, Australia banks may offer the following features in selected loan packages.

  • Additional repayments – this allows you to make extra loan payments without incurring a cost. Some banks will limit the number of additional payments you can make.
  • Redraw facilities – you can draw back any of your additional payments as required. This could be useful should you need emergency funds. Without income documentations.
  • Offset account– you can use your savings to offset the interest incurred on the loan. This means that you pay less interest over time, and can get your loan paid off faster.

Australia bank: 70%, 4+%. Singapore bank: 70%, 2+%.

Many people refinance to get a better rate. Some prefer to have the loan in their home country for convenience of repayments. You may be looking for certain features or have your specific requirements. Do find out more on our Australia mortgage section.

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