Foreign Currency Mortgages for Australian Expatriates and Overseas Investors

An Alternative Funding Mechanism for Expatriates and Foreign Investors

There are situations where the most effective form of financing for a property in Australia, or elsewhere in the world, is a foreign currency loan. These loans allow expatriates and offshore investors to borrow in a currency other than Australian dollars to purchase or re-finance a property in Australia, or elsewhere – allowing you to take advantage of lower interest rates. Currencies available include US Dollar (USD), Pounds Sterling (GBP), Euro, Singapore Dollar (SGD), Canadian Dollar (CAD), Hong Kong Dollar (HKD), Japanese Yen (JPY), Swiss Franc (CHF) and New Zealand Dollar (NZD), amongst others.

Of course, these loans can give rise to exchange losses (and gains) and you need to approach them carefully, fully understand their operation and seek professional advice where appropriate. However, for the long term Australian expatriate, or foreign investor, with either access to an income stream in the borrowing currency, or other assets in the borrowed currency, they can provide access to materially lower borrowing costs when compared to AUD loans.  The table below provides a simple illustration of the differing annual repayment costs based on interest and exchange rates current as at March 2008 on a AUD500K loan over 25 years with quarterly repayments of interest and principal on a property in Australia, the United Kingdom, New Zealand or Singapore.  The comparison does not include loan establishment or other fees and is provided for illustration purposes only – figures should be confirmed with the loan provider.

Exfin offers access to both European and Australian banks with specific experience in the provision of property finance for expatriates and offshore residents who intend to purchase property in Australia, New Zealand, United Kingdom, Spain, France, Portugal, Hong Kong, Singapore and selected locations in Dubai, Canada and the USA. Loans in support of purchases in other countries are possible - please provide full details in any Inquiry.

A short summary of the features of their mortgage loan facility appear below:

• A free currency switching facility

• Up to 100% financing available **

• Competitive interest rates

• Flexible and sophisticated repayment options

• Cost savings such as no early repayment penalties and no letting penalties

** subject to credit status and additional security

Please note that there is a minimum loan size of US$150,000 or its equivalent, and that the percentage of the purchase price that you can borrow may depend on the currency borrowed. Australian residents (ie. not expatriates) should note that their access to these loans is very restricted - and available only if they have access to sufficient foreign income (in the currency of their loan) to service the loan and/or assets to secure the loan.

If you are interested in exploring this facility, and receiving more specific details without obligation, please complete the Inquiry Form referred to below.  There may be occasions where we will require more details from you before progressing the inquiry with the Bank(s), but normally you can expect a response within one working day of the Inquiry.

Complete the Foreign Currency Mortgages Inquiry form