Housing is the biggest expense for any international student. Renting is a top choice, but rent is exorbitant in some key business areas like Sydney. It’s so high that some would rather pay a monthly mortgage for the same price range. Sometimes, the monthly rent is higher than the average mortgage monthly repayment.
Can you qualify for a mortgage with a student visa?
It may be challenging to qualify for a mortgage on a student visa alone, but it’s not impossible. First, as an international student, you are allowed only a limited number of hours per week (usually 20); thus, you have a limited income. Income is one of the criteria that lenders look at when lending money. If you have a job that legally falls within the allowed work hours and can sustain you, that is a great start.
To qualify for a mortgage, you must:
- have a good credit history in Australia
- have stable employment.
- prove that you can shoulder the monthly repayment on top of your expenses on your own, without relying on external funds (i.e., your parents).
- In some cases, you must have a 20% deposit and access to another 5% for other costs such as stamp duty.
What visas are accepted?
- Skilled Graduate Visa (Subclass 485)
- Skilled Regional (Provisional) Visa (Subclass 489)
- Student Visa (Subclass 500) (subject to lender’s discretion)
- Skilled Recognised Graduate Visa (Subclass 476) (subject to lender’s discretion)
How much can students borrow?
90% LVR is possible, but lenders who grant this have very strict lending criteria. The most common is 70 to 80% LVR for those who can qualify for the minimum income requirement.
What if I have foreign income?
Lenders will not honor your foreign income, no matter how big. Income requirements include payslips, tax returns, or a letter from your employer stating how much you earn. Only Australian income is accepted.
What are my other options?
Students who do not earn enough in Australia may ask for their parent’s help. In this case, your parents will be foreign property investors. They must apply for the Foreign Investment Review Board’s (FIRB) permission. This is a process that takes around two weeks.
Once they get approval from FIRB, they can apply for a mortgage. Foreign property investments are limited to new houses and not existing properties.
If you can handle the loan alone without your parents’ help, you will still need FIRB approval because you are a non-resident.
Mortgages for student visa holders can get complicated, plus they highly differ per case. To know if you are qualified, call us, and we will help you with your housing needs as you study in Australia.