There are various financial options available to investors when purchasing Australian property. Below is an overview of investment finance currently available in Australia.
Financing your property investment in Australia is an important decision and could entail injecting your own cash resources or, as many serious investors prefer, a mortgage or equity release scheme.
The mortgage market is well developed in Australia and foreigners can obtain repayment or endowment mortgages from bank and non bank lenders to cover up to 80% of the valuation or purchase price. Interest rates can be fixed or variable, though rather on the high side. For this reason, some investors see it fit to arrange alternative finance in their own countries.
Interest only mortgages for all types of property are a standard in the Australian property market and are an attractive option for some investment strategies.
Currently non-status or self-certification mortgage facilities are not offered by Australian institutions and you will need to prove your income for all loan applications. Rental income from the investment property to be purchased is also included in the calculation of the loan amount.
Many off-plan developments in Australia offer installment plans over fixed periods. Charges applicable vary according to developer and repayments are usually index linked.
The developer can often offer the most competitive finance options to investors and these are certainly worth considering when looking at mortgage alternatives from their own countries.
As always, before making a commitment, we recommend you discuss your investment strategy with a lawyer, a reputable property agent with experience in the area and even a financial advisor.
Click here to learn more about financing your Australian property with a mortgage.
Taking out a loan on the value of your house that is either on the market or in the process of being sold is popular for many investors who do not want to let a good opportunity slip their grasp.
Equity release allows investors to releasing cash from the home without having to sell up and move house. If you have property in your own country and would like to borrow against this in an equity release plan, we can introduce you to independent financial advisors who will help you raise the necessary finance for your investment in Australia.
If you are in your mid-50s or older and own your own home, you may be able to get a cash lump sum, a regular income, or both, by using an equity release scheme based on the value of your property. These schemes can be helpful in certain circumstances to raise funds for a mortgage to finance your Australian property investment.
Not everybody falls into a category and some investors will need to raise finance in an alternative fashion to equity release or mortgage options.
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