The maximum loan to value ratio (LVR) that is available on an Australian property purchase depends on the your citizenship and the currency on which you choose to finance.
When buying an Australian property with an Australian dollar loan there are many options with lenders in Australia and overseas.
An Australian Citizen can borrow 80% of the value of a property under a normal loan offering, however they have the opportunity to borrow up to 95% of the value of a property if they qualify for Mortgage Protection Insurance.
For any foreign investors, finance is readily available for up to 80% of the value of the Australian property.
If you are living out of Australia, either as an Australian expatriate or foreign national, you have the opportunity to acquire your Australian property with a loan in other currencies such as USD, SGD, HKD, or GBP. Usually the bank will only lend in the currency that you earn in rather than allowing you to choose any currency.
This may offer the opportunity to seek lower interest rates than those offered in Australian dollars however you must remember that you are taking the currency risk so movements in the exchange can add to the cost of borrowing or indeed give the potential to profit from exchange gains.
The banks will usually lend less than in Australian dollars, typically a maximum LVR of 75%, as they seek a buffer against the short term movement in the exchange.
In both lending options, you have the ability to use any current Australian property holdings as additional security for new acquisitions. As such even though you may only be entitled to 80% or 75% lending on the new acquisition, the balance may be covered by another Australian property which would allow the bank to lend you the entire purchase price of the new acquisition provided there was enough security cover across all your property holdings, current and new.
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