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There’s been a great deal of debate on mortgage rates in Australia of late. Let’s face it, when isn’t there?
It can be argued that there’s still a lot of misunderstand and a general lack of awareness when it comes to expat mortgages, which is frustrating. Migration agency True Blue recently published this useful guide that gives those who currently reside in Sydney and other parts of the country a far better idea of what they need to do in order to apply for a mortgage while living here on a temporary visa.
Just because you’re not a fully-fledged Australian citizen, that doesn’t mean you cannot buy property Down Under. Once you’ve familiarised yourself with the process of applying for a mortgage as an expat, there are plenty of other things to consider.
Getting your head around interest rates in Australia
It has been widely suggested that the Reserve Bank of Australia (RBA) could lower the official cash rate in the coming months, and leaders of ANZ have predicted a 50 basis point cut within the first half of 2015. If this turns out to be accurate, the base rate will reach a new record low of just two per cent.
This will obviously have a knock-on effect for mortgages and other loans and savings packages, so it’s no surprise that people have already been reacting to the possibility of another interest rate cut. According to the Australian Finance Group, the number of borrowers changing their mortgage arrangement increased to 37.3 per cent in December 2014, which was the highest level since March 2012. With so much speculation about falling rates, it’ll shock nobody to see that just 14.5 per cent of mortgage customers opted for fixed-rate terms last month, down from 17.1 per cent in November 2014.
As an expat, you may be a little limited as to who will provide you with a mortgage. As the True Blue guide shows, there are some lenders that see non-permanent residents as too big a risk, but there are others that offer special deals for expats. Make sure you know the latest state of play on interest rates before you commit to any deal.
Know what Sydney has to offer
When new ‘Best Places to Live in the World’ reports are released, you don’t normally have to look too far down the list to find Sydney.
The city is a firm favourite among expats, which means property prices can be higher than in other parts of Australia. As with any urban area, prices can vary drastically depending on the area you want to live in. You may think it’s more cost effective to buy a new home in the suburbs, and in many cases you’d be right, but there are certain places on the outskirts of Sydney that are extremely expensive. Affluent Mosman, which reported property sales worth a stunning $1.1 billion in 2014 alone, is a good example of one of the more expensive Sydney suburbs.
All in all, it’s imperative that expats do their research before committing to a purchase. Your earnings will obviously determine the size of mortgage that you can access, so you need to make sure you find a property in an area of Sydney that won’t overstretch your budget.
Sources used: Not for publication
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