Australian Mortgages for Aussie Expats in Hong Kong

Here is everything you need to know about Australian property loans when applying from Hong Kong.

Loan Types: Variable, Fixed, or Interest

Hong Kong citizens and expats living in Hong Kong can apply for residential and investment loans or refinancing. Lenders offer the same home loan types for Australian citizens, non-residents, and foreign nationals.

Hong Kong citizens and Aussie expats can apply for up to 15 years of interest-only home loans. They will become a principal and interest loan for the remainder of the loan term. Similarly, Australian citizens can get a maximum of 15 years of fixed interest rates. The home loan would then transfer to a variable-rate home loan.

Loan Term: Loan Size and Term

Hong Kong citizens can get a maximum loan term of 30 years, the same as most Australian citizens. Most lenders require a minimum loan size of $100,000 for Hong Kong citizens. Investors from Hong Kong can borrow up to 75% of the loan-to-value ratio. Expats may borrow up to 90%, although this depends on your borrowing power. Odin Mortgage can help find you the best loan for your situation.

Loan Features: Home Loan Package: Offsets and Redraw

Aussie expats in Hong Kong can get all the features available to permanent residents residing in Australia. Depending on your borrowing power, you can negotiate offset accounts and redraw facilities. Hong Kong investors are also eligible for the same home loan features. Most lenders will also get phone and internet banking—although phone banking may not work in your area.

Pros and Cons of home loans for Australian expats in Hongkong

Pros:

• Australian citizens in Hong Kong might be able to borrow up to 90% loan-to-value ratio with the same interest rates as those in Australia.
• Some lenders might use Hong Kong tax rates to assess borrowing power for Australian expat home loans. Hong Kong tax rates are capped at lower percentages. (maximum 15% on net assessable income).
• Hong Kong nationals married to Australian citizens might be able to borrow up to 95% loan to value ratio.
• Hong Kong investors (who are not Australian citizens or permanent resident visa holders) can borrow up to 75% loan to value ratio.

Cons:

• Some lenders might treat dual citizenship holders as foreign borrowers and restrict their borrowing power.
• If you earn solely in HKD and cannot provide sufficient evidence of your income, lenders might only consider 80% of your income.
• To qualify for an Australian property mortgage in Hong Kong, you may need to show an Australian Power of Attorney.

Key Features of Australian Expat Home Loans from Hongkong

Here are the main features you get on your Australian property mortgage when applying from Hong Kong:

• Deposit Size: Most Australian banks will prefer expats in Hong Kong to have 5% genuine savings. Most Hong Kong citizens will need at least a 20% deposit. Some lenders might require 30%.
• Borrowing Power: If you’re earning HKD, some lenders might only consider 80-90% of your net earnings. Therefore, your borrowing power could be significantly lower.
• Repayment Options: Most lenders will offer flexible repayment options to Hong Kong residents. Plus, Aussie expats can make early home loan repayments without triggering penalties.
• Interest Rates: Aussie expats in Hong Kong are still Australian citizens so should get the same competitive interest rates as those living in Australia. As a Hong Kong national, you may have to pay slightly higher interest rates because you will need a specialist lender.

Key Facts about Australian citizens in Hongkong

There is a large reciprocal expat community between Australia and Hong Kong, with around 100,000 Australians in Hong Kong and 96,000 Hong Kong citizens in Australia. For Aussies getting a mortgage in Hong Kong, self-employed borrowers may qualify for 80-90% LVR depending on documentation.

One key requirement is financial documents translated into English and certified by an interpreter. The good news is that Australian expats can expect to get the same competitive home loan rates as borrowers living in Australia.

Applying for an Australian Expat Mortgage

When applying for an Australian mortgage as a Hong Kong citizen or expat in Hong Kong, you’ll need to meet the lender’s eligibility criteria.

Eligibility for Expat Loans Australia

Whether you are looking for a residential or an investment property loan in Australia, make sure you apply with a lender who specializes in mortgages from Hong Kong. You’ll also need to meet the following criteria:

• A good credit score or history of making repayments on time.
• Australian citizenship (if you’re an expat).
• 20 – 30% deposit if you’re a Hong Kong national.
• Over 18 years of age.

Documents required

• Two forms of income verification, such as recent pay slips, an employment letter, or tax returns.
• Form of identification, such as a passport, driver’s license, or birth certificate.
• Details of your expenses, such as other credit liabilities and living costs.
• Details of your prospective property purchase (unless pre-approval)

Other Considerations

Double Taxation Agreement

While Australia has a tax treaty with China, this does not extend to Hong Kong. If you’re an Australian tax resident, your income in Hong Kong is subject to Australian taxes. Therefore, speak to a professional to make sure you don’t end up paying double taxes.

Generally speaking, most expats are not considered tax residents after living overseas for two years.

FIRB Approval

Australian expats are citizens. Therefore, you won’t face any government restrictions on buying property. However, if you’re a Hong Kong citizen or married to one, you may have to apply for FIRB approval.

Typically, foreign nationals are restricted to purchasing new property or vacant land only.

Stamp Duty Surcharge

Similarly, if you’re a Hong Kong citizen or purchasing property with a Hong Kong citizen, you might have to pay the stamp duty surcharge. In most states, the foreign resident surcharge is between 7% – 8%.

There is no foreign resident surcharge in the NT, ACT, or TAS.

Frequently Asked Questions

Can I get an Australian Expat Mortgage in Hong Kong?

Expats living in Hong Kong are eligible for the same mortgage types, features, and interest rates as Australian citizens living in Oz. You might struggle to prove your foreign income if you don’t have sufficient documentation.

Is buying property in Australia possible for non-residents?

Non-residents in Hong Kong can apply for home loans to buy Australian property with a specialist lender. Foreign property investors may need to provide a deposit of 20 or 30%.

How much can I borrow for home loans in Australia if I'm in Hong Kong?

While lenders prefer an LVR of 70 or 80%, Australian residents in Hong Kong may borrow up to 90% of the property value. Some lenders might even approve an LVR of 95%.

How Do Lenders View Hong Kong Dollars?

As there are so many Australian expats in Hong Kong, banks are used to dealing with Hong Kong currency. If you earn HKD, this shouldn’t impact your home loan approval chances. However, some lenders might restrict your loan size if your main source of income is in HKD. Lenders might only consider between 80% - 100% of your income to account for currency fluctuations. That said, Hong Kong dollars are pretty stable and lenders are trusting of the currency.