Home loans for 189 visa holders

What lenders look at

Many lenders assess a 189 holder on the same policy as a citizen. The questions that change the outcome are less about the visa and more about how recently you arrived.

FIRB and the established-home ban

You don’t need FIRB approval. Holders of permanent visas are exempt from needing approval to buy residential land, and that includes established homes. The foreign-buyer ban on established dwellings doesn’t apply to you.

FIRB’s definitions do mention a 200-day test: a permanent visa holder who has been in Australia for 200 days or more in the previous 12 months is “ordinarily resident” and not a foreign person. But the exemption from approval for permanent visa holders is stated without that qualification. In practice the 200-day number matters for NSW duty, not for FIRB.

If you are buying with a partner who is on a temporary visa, the picture changes for their share. See the partner visa guide and the visa overview.

Duty, concessions and grants in each state

As a permanent resident you are outside the foreign buyer surcharge in every state except one case: NSW applies surcharge purchaser duty to permanent residents who were in Australia for fewer than 200 days in the 12 months before the contract, unless they qualify as an exempt permanent resident. First home concessions and grants are open to you wherever they exist.

Deposit and LMI

The 5% Deposit Scheme is the biggest advantage the 189 gives you over a temporary visa. If you are a first home buyer (or haven’t owned property in Australia in the last 10 years), will live in the home and buy under the price cap, you can buy with a 5% deposit and the Government guarantees part of the loan, so no LMI is payable. There are no income caps. The NSW cap is $1,500,000 in Sydney and the listed regional centres and $800,000 elsewhere in the state.

Owning a home overseas doesn’t stop you using the scheme: the 10-year test is about property in Australia. It can matter for some state concessions, though. In Queensland, for example, the first home concession is only for buyers who have never held an interest in residential land anywhere, overseas included.

Without the scheme, a deposit under 20% usually means paying LMI. LMI is a one-off premium that protects the lender, not you, and it is often added to the loan. We don’t publish LMI estimates because premiums vary by insurer and lender; we get a figure for your loan before you decide.

Help to Buy is for Australian citizens only, so it isn’t available to you until you become a citizen.

Permanent from the start

The 189 is permanent from the day it is granted, with a five-year travel facility. There is no next visa to wait for, which is why 189 holders can usually buy sooner than people on provisional visas.

If you came to the 189 from a 491 or 494, Home Affairs requires you to have held that visa for at least three years before applying for the 189. Once the 189 is granted, the regional condition of your old visa is no longer relevant to your lending.

Citizenship changes two things for a home loan: Help to Buy opens up, and the NSW 200-day test no longer applies. For most 189 holders neither is a reason to wait. Being in a stable job for long enough to satisfy lenders usually matters more.

Documents checklist

For a 189 application, the visa grant notice and VEVO record do most of the visa work. The rest is the usual income and savings evidence.

• Passport
• Visa grant notice
• VEVO check showing visa conditions and expiry
• Recent payslips
• Employment contract or employer letter
• Bank statements showing savings and deposit source
• ATO notice of assessment or income statement
• International movement records, if you are buying in NSW within your first year
• Statements from overseas accounts, for savings you transferred
• Statements for any loans you still have overseas

This list is common lender practice, not a government rule. Each lender sets its own requirements, so we send you a checklist for the lender we recommend.

Illustrative scenario: a new arrival buying a Sydney unit

A software engineer was granted a 189 while living overseas and moved to Sydney four months ago. She started a permanent full-time job on arrival and has her deposit in an Australian account. She is a first home buyer and wants an established two-bedroom unit for $780,000 using the 5% Deposit Scheme.

Because she has been in Australia for fewer than 200 of the last 365 days, the NSW surcharge question comes up. The table shows the costs if she signs now and is treated as a foreign person for surcharge purposes, and if she signs once she passes 200 days.

Common mistakes