Loan in Australia for an Overseas Property?

sickre on 20/05/2020 - 00:38
Last edited 20/05/2020 - 00:39

I am self-employed and work in IT, based in Eastern Europe.

I want to borrow money in Australia from an Australian bank and buy a property overseas.

In my target country, interest rates are 20%.

My income is about $30,000/year which is suitable for the loan (~$180,000) I would need to make.

My parents who own a house in Australia and have other assets are willing to guarantee the loan. I am an Australian citizen and so are they.

Are there any banks which offer these kind of loans, at rates around 3% instead of 5%+ ?

Thanks!

Financial

Comments

  • GangGang on 20/05/2020 - 01:01

    have a read here for some info.

    • sickre on 20/05/2020 - 01:18

      Thanks, yes I've read all of those articles but was hoping for some first-hand experience.

      I will need to contact a mortgage broker I guess.

  • WreckTangle on 20/05/2020 - 06:31

    The house is overseas and your job is overseas? Are they in the same country?

    • sickre on 20/05/2020 - 11:35

      I work remotely and will work and live in the overseas property, yes.

      $30,000 is low in Australia but a very good income in that country.

  • [Deactivated] on 20/05/2020 - 07:50
    +1

    Unless the bank secures a mortgage over your parents house, and it can be shown they can service the loan i doubt any banks would touch you.

    It also means your parents might be homeless if you default. Given the royal comission recently i doubt a bank would take that risk.

    • dizzle on 20/05/2020 - 09:03
      +1

      Yeah, the only way I can see it is if your parents apply for the loan. I don't think the banks would secure a loan using overseas funding (your wages) for an overseas property, when you are based overseas. Even with your parents home as security.

      So if your parents home is already paid off, you may be able to take a mortgage out on that…I wouldn't recommend it though.

      By the way, in Australia the minimum wage per year is around $38,000 (740/week). I'm not sure there would be many banks willing to give low interest loans on less than that.

    • sickre on 20/05/2020 - 11:36

      Their house is valued $1.3m. The property in EE is $260,000.

      They have other assets worth $2m.

      • dizzle on 20/05/2020 - 12:41

        Yes, but it would be likely that they need to apply with their income using the equity in their home.

        As well as that, a small loan (and that is a small home loan) on a low income will not get them much money, so they will probably give you a higher interest rate.

        But you have to talk to a broker/bank to see what they say.

  • ihbh on 20/05/2020 - 08:10
    +1

    Mate, bigger picture issue to think about: read up on interest rate parity and exchange rates, before you do anything.

    • sickre on 20/05/2020 - 12:14

      I earn in USD and houses in the country are valued in USD.

      In this country its cheaper for me to buy with a mortgage than rent.

  • cloudy on 20/05/2020 - 09:24
    +1

    There’s seriously a country with 20% interest rates for home loans? OP, would you mind linking it?

  • Typical16-bitEnjoyer on 20/05/2020 - 09:25
    +1

    Absolutely zero Australian banks will touch you. Sorry.

    • [Deactivated] on 20/05/2020 - 10:01

      Probably phillipines or the like.

      • [Deactivated] on 27/05/2020 - 21:03

        Since when is the Philipines in the Middle East?🤨

  • capslock on 20/05/2020 - 10:48
    +1

    As mentioned by others, the only way this will work is if your parents take out a loan using their own income. Your parents then gives you the money that they borrowed.

  • SydneySwan on 20/05/2020 - 11:37
    +1

    No Australian bank is going to touch this. They will only give a loan secured on Australian property or other Australian assets. Some finance house might consider this sort of proposition but they are going to want an interest rate in the high teens or probably higher and their loan management fees will be enormous.

  • [Deactivated] on 20/05/2020 - 21:29
    +1

    Possibly better that your parents take a mortgage out on their property and you pay them to fund the repayments. I hope you a on good terms with your parents both now and after….my parents would tell me I can have the money when they are dead not now

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