Foreign Income for Mortgages.

I currently have IP's between Australia and NZ using CBA in Australia and ANZ across the ditch.
I am an Australian citizen, but a non resident for tax purposes. However, I will become a resident in Australia again later this year.

I currently pay a high IR on our I/O loans at well over 5% and wanted to know if this is based on my foreign income or the fact that I am a non resident? (Or both...)

I would like to purchase another IP later in the year and wanted to know whether my IR will improve based upon my residency or will I still pay the higher rate based upon a salary in Euros?

 

Neither probably. There are no premiums on rate for non-residents. I don't think even the discounting would differ.

 

Thanks Terry,
So I just need to shop around for a better rate and/or better broker?

 

Yes. Or ask for a discount

 

Cheers Rolf,
I refinanced and purchased another IP last year in Oz, but my IR was still over 5%.
I am going through the process again now with my existing broker who hasn't been great when it comes to investment info, hence I am doing my own research. (Been stalking PC for quite some time...)
Other brokers I have approached were reluctant to assist due to the foreign income, so I stayed with my original broker.

 

Its likely the product, you may not need a refi.
INV IO Variable rate loans can begin with 5's. This is usually if it was applied for post regulatory crackdown on INV IO lending, where discounting dropped big time (around this time last year i think).
Now discounting is far better again, so rates have come down.
It may just be the time you requested your loan, not poor performance from your broker or your individual income arrangements.
My suggestion, call the bank and try and get a lower rate. Alternatively adjust the product to a cheaper one (e.g. fix 2 year IO rates in early 4% range vs 5's!).

 

Thanks Redom, appreciate the info.
Working on this at the moment.