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    Thread: Australian Mortgages


    1. #1

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      Australian Mortgages

      Andrew from Vista posted this information recently and I thought it would be of interest to some of our members on here.



      Mortgage Deposit / Loan to Value (LVR) requirements


      The minimum deposit requirements at the moment range from 5% 10%, this means that the maximum loan to value (LVR) would be 90% - 95%.

      As an example if a lender required a 5% deposit on a $350,000 property the loan to value would be 95% i.e $17,500 deposit (therefore mortgage amount $332,500 / property price $350,000 = 95% LVR)

      Different conditions apply to Temporary Residents (see below)


      Lenders Mortgage Insurance


      If someone is borrowing over 80% LVR i.e they have a deposit of less than 20% then a Lenders Mortgage Insurance (LMI) premium is payable.

      This is a one off insurance premium that is designed to protect the lender in the event of a default by the borrower leading to the lender having to sell the property at a price less than the outstanding loan.

      The premium payable is tiered based upon the overall LVR and property price.

      As an example of the cost of LMI, a property price of $350,000 with an LVR of 90% i.e $315,000 mortgage would incur a Lenders Mortgage Insurance premium between $4,600 - $5,800 dependent upon the lender.

      This fee can be paid directly from your own funds or in many cases added to the mortgage, by adding to the mortgage this is known as capitalising the LMI.

      There are some lenders that are in a position to offer a reduced LMI premium under certain conditions, one being that certain Medical Professionals pay no LMI up to 90% (this could save thousands!!)


      Costs to Buy (Stamp duty etc)


      This varies from state to state and can in some cases be up to around 5% (the 5% relates to South Australia).


      Home Owner Grants and Concessions


      Again these vary from state to state:

      For ACT see here: http://www.revenue.act.gov.au/home_b...me_owner_grant

      For NT see here: http://www.nt.gov.au/ntt/revenue/hom...rst_home.shtml

      For SA see here: http://www.revenuesa.sa.gov.au/fhog/index.html

      For TAS see here: http://www.sro.tas.gov.au/fhog

      For VIC see here: http://www.sro.vic.gov.au/SRO/sronav...1004420E8?open

      For WA see here: http://www.finance.wa.gov.au/cms/section.aspx?id=209

      For QLD see here: http://www.osr.qld.gov.au/duties/tra...on-rates.shtml

      For NSW see here: http://www.osr.nsw.gov.au/benefits/first_home/


      Temporary Residents

      Temporary residents are allowed to buy property and are able to obtain mortgages to do so however there are usually some conditions.


      Foreign Investment Review Board (FIRB) approval - http://www.firb.gov.au/content/real_...esidential.asp

      It is a requirement to obtain FIRB approval prior to purchasing a property. If the property is to be used as your main residence then there are generally no issues with the type of property purchased i.e new or established.

      FIRB approval for temp residents buying a home is generally a formality but does have to be obtained.


      Mortgages restricted to 80%

      Generally temporary residents are restricted to borrowing a maximum of 80% LVR meaning a deposit of at least 20% is required.

      The reason behind this is due to the Lenders Mortgage Insurance companies classing temporary residents as non-residents and their reluctance or an inability to insure them.

      That said, it is possible in some cases for temporary residents to borrow over 80% but the case must be of strong merits.




      Director - Vista Financial Services - Financial Advisor for Poms in Oz - UK Pension Transfers / Financial Advice
      Andrew@vistafs.com.au AFA Member, Adv Dip FP www.vistafs.com.au Ph: 08 8381 7177
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    2. Moneycorp - Commercial foreign exchange since 1979
    3. #2

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      I heard an ad on the radio today offering no deposit house and land packages, imagine there are criteria to meet but it's never been easier to get onto the ladder..they sure are loosening the reins a bit
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