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491 Visa Holder Home Loan: All You Need to Know

491 Visa Holder Home Loan

Did you know that a 491 visa holder home loan could be your path to permanent citizenship? Well, now you do, so keep reading to learn all you need to know to take advantage of this program. 

 Let’s start with the basics. 

How much home deposit will you need to buy a property on a temporary visa? 

We get this question a lot, so we will answer it first. You will generally need about 10% of the house price just for the deposit. However, other fees you must pay will typically amount to 6-7% of the house price. Therefore, we usually recommend that individuals on a temporary visa (Like a 491 visa) save about 17-20% before starting the home loan application.

Another point that might be useful to know is that due to international tax agreements entered into by the Federal Government, you will not have to pay a foreign owner surcharge if you are a citizen of New Zealand, South Africa, Germany, Finland, Japan, Norway, India or Switzerland. Find out more at international tax treaties here.

Can you buy a house or other property without a Permanent Residency (PR) in Australia? 

Purchasing a property in Australia without holding a Permanent Residency (PR) is indeed a possibility, although one with specific parameters to navigate. Thats why it’s essential to familiarize yourself with certain nuances to ensure a successful loan and purchase process. 

Here’s a breakdown of the key factors you need to keep in mind to buy property as a temporary visa holder. 

Australia 70's home

You need approval from the Foreign Investment Review Board (FIRB) 

Before you can embark on your property journey, you’ll need to secure approval from the FIRB. This regulatory body is in charge of overseeing foreign investment within Australia and they assess applications based on factors such as property type, location, and your intended use of the property. Your application’s success hinges on these deliberations, so you need to make sure your documentation confirms without a doubt that you meet the eligibility criteria. 

There is also an application fee youll need to pay, currently set at AUD $5,000 for most investment proposals. You can find more information about that here. 

There are specific eligible property types 

While many avenues are open for this scheme, there are also some limitations. You can explore a potential new home, vacant land, and properties that are part of planned developments. However, the purchase of established homes within major cities is not covered by the scope and investment opportunities offered by this program. 

You will likely need to pay a higher deposit 

Financing a property acquisition without PR involves a nuanced financial balance because financial institutions can stipulate a larger upfront deposit as part of their terms to get you approved. This makes it a little bit harder for 491 visa holders to get a home loan, but the requirement is designed to mitigate risk for lenders and evaluate your commitment level. 

Your mortgage will be required to be insured 

For added security in all these transactions, lenders can request mortgage insurance, particularly when you lack permanent residency. This insurance safeguards the lender in situations where you may be unable to repay your loan and keeps schemes like this safe and viable for everyone long-term. 

You may be subject to the Foreign Buyer Property Stamp Duty Surcharge

This cost varies substantially and will depend on where you want to buy property. There is currently no Foreign Buyer Property Stamp Duty Surcharge in NT and ACT, but in NSW, VIC, and QLD the surcharge ranges from 6-8% of the property’s purchase price.

What is a 491 visa? 

The Skilled Work Regional (Provisional) visa (subclass 491) is a visa that allows you to live and work in regional Australia for up to five years and if you meet certain requirements, you can later apply for permanent residency. 

Nowadays, 491 visa holder home loans can help you meet these requirements, so if youve been dreaming of making Australia your permanent home, you should investigate this amazing opportunity. 

While it’s important to note that it is not a guaranteed pathway, buying property in Australia can help you establish ties and show your commitment to the country. This in turn could potentially strengthen your case for permanent residency by demonstrating your willingness to invest in the Australian economy and become a part of the community. 

skilled professional visa

Who’s eligible for a 491 visa home loan? 

There are some basics you must meet, but keep in mind that each lender can require specific things as well, so you still need to do some research. 

First off, you need to have a valid Skilled Work Regional (Provisional) visa (subclass 491). Plus, this visa needs to have a minimum of 12 months still left in its validity. You also need to prove you have a stable income and show a reliable job history to be considered. 

Regarding numbers and finances, youll typically need to get at least a 20% deposit based on the property’s value. And because of your migratory status, mortgage insurance is usually required as well. 

It’s important to note that if you are close to getting your PR visa then it may be worth waiting to get a home loan. Getting a home loan as a PR visa holder is much easier and will reduce your loan eligibility requirements, improving your home loan terms and saving you headaches.  

491 visa holder home loan

How is a 491 visa holder home loan different from loans offered to Australians? 

Because migratory status changes the dynamics of risk and benefits for banks and lenders, you can expect your interest rate to be higher, to be asked for a larger deposit, or even both, depending on your particular situation. 

Thats why you should always consult a professional who will guide you and make sure youre getting the best deal possible with your loan and conditions.  

Do I need to pay a Foreign Investment Surcharge (FIS) as a 491 visa holder? 

Yes, some 491 visa holders also need to pay a foreign investment surcharge (FIS) when buying property in Australia, which is currently set at 3% of the property value. 

This isnt always the case as there are some exceptions, such as when you are buying a property in a designated regional area and you meet certain requirements, like living on the property for at least six months of the year. 

If you are a 491 visa holder and you are considering buying property in Australia, it is important to speak to a financial advisor or mortgage broker to find out if you need to pay the FIS or if youre exempt from this requirement. 

Some of the factors that may affect whether you need to pay the FIS include the type of property you are buying. The FIS only applies to investment property, buy does not apply if you are buying the property to live in it, for example. 

If you are unsure whether you need to pay the FIS, you should speak to a financial advisor or mortgage broker. We can help you understand the requirements and assess your particular situation. 

How much can you borrow on a 491 visa holder home loan? 

The amount you can borrow will depend on several factors, including your income, your employment history, the amount of your deposit, and the lender’s criteria. In general, you can expect to borrow up to 80% of the property’s value. 

Heres what to do to increase your chances of getting approved for a 491 visa holder home loan: 

  1. Make sure you can show a stable income and a continuous employment history. 
  2. Check that you have a minimum of 12 months remaining on your visa, so definitely dont wait to apply at the last minute. 
  3. Make a larger deposit than you are required to. The bigger the better because that way youll look less risky” to a lender. 
  4. Get pre-approved for a loan before you start looking at properties, so you know what you can and cannot afford. 

Can I qualify for a home loan while on a Bridging visa? 

Yes, you are eligible to buy a property with a bridging visa holder while waiting for the 491 visa, but there are some things you need to keep in mind such as the fact that lenders are legally allowed to request further documentation if they deem it necessary. In addition to that, you need to meet the same requirements as if you were already on a 491 visa. 

491 visa holder home loan

Where to invest if you’re planning to get a 491 visa holder home loan? 

As previously discussed, these loans have certain restrictions and one of them is geographical, which means you cant buy just anywhere. But fear not, Australia is a big country with lots of good investment opportunities. 

A great option for those looking to invest in a home while working on their path to Australian Permanent Residency is Cairns. 

Cairns is an attractive place to buy real estate because it is a popular tourist destination, which means property values tend to go up most of the time. It also has plenty of new land and new homes available, which is suitable for the 491 Visa holder home loan criteria. The city is located on the Great Barrier Reef and is known for its beautiful beaches, rainforests, and laid-back lifestyle, so youll love living there! 

The property market in Cairns is relatively affordable when compared to most of Australia. The median house price in Cairns is around AUD$550,000 making it a more accessible option for 491 visa holders. 

If youre not a fan of cold winters, Cairns is a great option because the city has a warm and tropical climate all year round, with average temperatures going from 22 to 28 degrees Celsius. 

In case Cairns isn’t your cup of tea, other regions such as Townsville, Canberra, and the Gold Coast, also offer special conditions for foreign nationals. Specific rules and legislation in these areas make the requirements for getting visas and loans approved much easier to fulfil than in the big cities, and we have the expertise to guide you in the process.

Which other visas can get a home loan in Australia? 

Here is a more comprehensive list of other temporary visa that might be eligible to get a home loan in Australia: 

  • Standard Business Sponsorship (Subclass 457).
  • 482 Temporary Skill Shortage (TSS) visa loans.
  • Skilled Employer Sponsored Regional (Provisional) Visa (Subclass 494).
  • Temporary Work (Long Stay Activity) visa (Subclass 401). 
  • Temporary Work (International Relations) visa (Subclass 403). 
  • Investor Retirement visa (Subclass 405). 
  • Working Holiday Visa (Subclass 417). 
  • Business Owner (Provisional) Visa (Subclass 160). 
  • State or Territory Sponsored Business Owner (Provisional) Visa (Subclass 163). 
  • Senior Executive (Provisional) Visa (Subclass 161). 
  • State or Territory Sponsored Senior Executive (Provisional) Visa (Subclass 164). 
  • Investor (Provisional) Visa (Subclass 162). 
  • State or Territory Sponsored Investor (Provisional) Visa (Subclass 165). 
  • Skilled Regional (Provisional) visa (subclass 489). 
  • Business Visitors Visa (Subclass 456). 
  • Visiting Academics Visa (Subclass 419). 
  • Sport Visa (Subclass 421). 

 

491 Visa Holder Home Loan
It is important to speak to a mortgage broker or financial advisor to get more information about the process and the requirements, as they can be complex or confusing for most people. 

At Eakins Finance & Insurance we are experts when it comes to 491 visa holder home loans and can guide you through the intricacies and offer solutions to meet your unique requirements, all while making sure you get the best deal for your home loan. 

Get in touch with us today, your property ownership journey awaits! 

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