Navigating loan finance in Australia
Settling into a new life in Australia can call for additional funds, and it makes sense to understand how the loan system works.
Home loans in Australia
For non-residents of Australia, buying property can be complex. It may require the permission of the Foreign Investment Review Board (FIRB), and even where this is granted, non-residents typically face stricter lending conditions than residents.
This makes it important to speak with a local home loan expert. Mortgage Choice for instance, is one of Australia’s best-known mortgage broking networks, whose brokers can explain the requirements as they apply to your situation.
It may be possible for non-residents to access other types of finance, such as a car loan. However, as with home loans, it’s essential to hold a type of visa that the lender is comfortable with – and this varies across lenders.
You’ll also need to earn sufficient income to be able to comfortably meet the repayments. Note too, among those lenders who may offer loans to, say, students on a visa, the loan term would be limited to whatever term is remaining on the visa.
There are some additional aspects of Australia’s lending system that it’s worth being aware of.
- Borrowers are spoilt for choice
The Australian lending market offers considerable choice, with over 50 local banks, foreign subsidiaries and a range of credit unions and building societies, all competing for business.
With such a high level competition, interest rates vary widely between lenders. But selecting a loan on the basis of the interest rate alone can be a costly decision.
Lenders are not only free to set their own interest rates in Australia, they can also charge a range of loan fees including upfront application fees and ongoing monthly fees.
This highlights the need to shop around between lenders, and select the loan that is right for your needs, rather than choosing what appears to be the lowest cost loan.
- Don’t overlook loan features
When it comes to deciding which loan is right for your circumstances, loan features play a key role. Not only can features make a loan easier to live with, they could also save money over time.
One in two Australians use a mortgage broker
The sheer range of loans and lenders available in Australia can be confusing. This explains why the majority (55%) of Australians turn to a mortgage broker for professional help.
A broker doesn’t only handle home loans. Many also arrange car loans, often with additional services available. Mortgage Choice for example, offers a free car buying service, and has a range of information guides available to download (including one written in Mandarin).
Accessing loan funds may be achievable as a non-resident – especially with the benefit of professional help, and it can let you enjoy your new life in Australia sooner.