International Banks and serviceability

Discussion in 'Loans & Mortgage Brokers' started by Jamesaurus, 13th Jan, 2020.

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  1. Jamesaurus

    Jamesaurus Well-Known Member

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    Has anyone here hit a serviceability wall in Australia then obtained finance from an Overseas bank to secure an Australian asset?

    Just trying to brainstorm here :)
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Unlikely an overseas bank would lend secured against Australian property as they would need to take a mortgage.
     
  3. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Years ago there were a number of lenders that offered loans to foreigners buying in Australia. It's possible that these lenders are still willing to do this, but I haven't seen anything about it in years.

    They were mainstream lenders in the Asian markets. A lot of it was done through Hong Kong or Singapore. A couple of things I remember:

    * You had to be living overseas. It wasn't really available to Australian residents.
    * LVRs were fairly low, about 60% I think.
    * The rates were cheap compared to Australian rates at the time. I suspect that they wouldn't be quite as cheap today. The cheap rates were also offset by currency fluctuation risks.

    This was about a decade ago, so my knowledge is kind of ancient history. It was before the regulation of 2011 and well before we realised APRA was actually a thing in 2015.
     
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    wbc OS recently asked their clients to move on

    ta
    rolf
     
    Terry_w likes this.
  5. Jamesaurus

    Jamesaurus Well-Known Member

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    Thanks guys. Have you come across this scenario for example though:
    Chinese citizen obtaining lending from Chinese back secured against Australian residential property?
     
  6. Redom

    Redom Mortgage Broker Business Member

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    We've seen some expat mortgages with HSBC - but I believe their quite strict on their requirements (need to be premium banking, need to have other assets held with them, etc). Not sure what their lending criteria is really, its not that common.
     
  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    very nice rates though using local security and funding and seem to turn off the service calc too :)

    ta
    rolf
     
  8. Redom

    Redom Mortgage Broker Business Member

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    I think HSBC also have a foreign currency product for expats specifically, in addition to their direct Aus funding. Not sure where funding comes from for this product, we've seen quite a few have it based of SGD currency & SGD funding rates though. Lots of SGD folk seem to have HSBC local currency mortgages backed by Aussie property. I think these were sourced a few years ago before some of the regulatory pressures. It does appear to be a 'tap on, tap off' type solution though. Think they switched it back on in mid 2019, but the product came with some quirks. Details below.

    International mortgage | Home loan for buying a property in Australia - HSBC SG
     
  9. Trainee

    Trainee Well-Known Member

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    The foreign currency denominated mortgages probably come with margin calls.
     
  10. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Not probably, assuredly :)

    ta
    rolf
     

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