British buyers have real options in the Australian property market
Getting an Australian home loan as a UK resident is more achievable than many people expect. Whether you’re living in Britain, planning to move to Australia or looking to invest from abroad, Australian lenders do work with foreign nationals. The process has specific requirements, and knowing what to expect before you apply can make a real difference.
Who qualifies
UK citizens and permanent residents are treated as foreign nationals when applying for an Australian home loan, unless you are the spouse or partner of an Australian citizen or permanent resident and are purchasing a property together as joint tenants.
Joint tenants is a specific legal form of shared ownership in Australia. It is different from tenants in common, which has different legal implications for ownership rights.
If you are buying an investment property from the UK without living in Australia, you do not need a visa to qualify for a mortgage. If you are living in Australia on a temporary visa, the type of visa you hold will affect your eligibility and the terms available to you.
Common visa types accepted by Australian lenders include the temporary business (long stay) visa and various spouse or partner visas. Our Australian home loan guide provides a broader overview of the lending landscape for international borrowers.
FIRB approval
As a UK citizen, you need to apply for approval from the Foreign Investment Review Board (FIRB) before purchasing property in Australia. FIRB is the Australian Government body that regulates foreign investment in Australian assets, including real estate.
FIRB approval does not prevent you from buying property. It determines what type of property you can purchase and under what conditions. Temporary residents are generally restricted to purchasing new dwellings or vacant land intended for development, rather than established homes for personal use.
Foreign investors purchasing investment properties have a broader range of options. Your eligibility for different property types will depend on your residency status and visa classification at the time of purchase.
Applying for FIRB approval typically involves a fee and a processing period, so factoring this into your timeline is important. A specialist mortgage broker familiar with non-resident applications can guide you through the requirements.
How much you can borrow
In Australia, the proportion of a property’s value you can borrow is known as the Loan to Value Ratio, or LVR. In the United Kingdom, this is referred to as LTV.
Under certain conditions, UK residents may be able to borrow up to 95% LVR. In practice, most applications from UK-based borrowers are approved at 80% or 90% LVR. If you borrow above 80%, you may be required to pay Lenders Mortgage Insurance (LMI), which protects the lender if you default on the loan.
Foreign investors purchasing from the UK are generally limited to 80% LVR. If your partner is an Australian citizen or permanent resident and you are purchasing together as joint tenants, you may be able to access higher LVRs.
Use our borrowing power calculator to get an indicative figure based on your income and expenses, and speak to a broker to understand what lenders are likely to approve for your specific situation.
Investment loans
What is known as a Buy-to-Let mortgage in the United Kingdom is called an investment loan in Australia. UK-based investors can apply for Australian investment loans to purchase residential property for rental income.
Foreign investors are typically limited to borrowing up to 80% of the property value. The same LMI rules apply: borrow above 80% LVR and you will likely need to pay LMI.
Interest rates on Australian investment loans are generally higher than owner-occupier rates. You can choose between variable rate loans, which most Australian borrowers prefer, or fixed rates available for terms of up to five years with most lenders.
In the UK, fixed rates are available for a minimum of two years and up to ten. In the US, fixed rates are more common. In Australia, variable rates are selected by the majority of borrowers, giving lenders more flexibility to pass on rate changes set by the Reserve Bank of Australia (RBA).
If you are self-employed, be aware that some Australian lenders do not approve loans for overseas investors with complex income structures. A specialist broker can identify lenders who are more flexible in this regard.
Things to watch out for
A few practical issues catch out UK buyers more than others.
For details on how US citizens approach Australian property purchases, the process and restrictions are broadly similar and worth comparing.
Common questions
Q: Do UK residents need FIRB approval to buy property in Australia?
Yes. UK citizens must apply for approval from the Foreign Investment Review Board (FIRB) before purchasing Australian property. The type of property you can buy depends on whether you are a temporary resident or purchasing purely as a foreign investor. FIRB approval is a standard part of the process and does not prevent you from buying, but it does set conditions on what you can purchase.
Q: Can UK residents get the same interest rates as Australian citizens?
It is possible to access competitive rates, but it depends on your situation and which lender you apply with. Applying with a lender that is comfortable with non-resident applications is the key. A specialist mortgage broker can identify the lenders most likely to approve your application at a competitive rate.
Q: Can I refinance my Australian property while living in the UK?
Yes. In Australia, refinancing (known as remortgaging in the UK) involves moving your loan to a new lender or releasing equity from your existing property. You can refinance an Australian investment property from the UK to access funds for further property purchases or to repatriate profits.