Recently, a major Australian bank announced that it will stop providing mortgage loans to overseas buyers, non-permanent residents, temporary residency visa holders and sources of income are regarded as overseas buyers, The move is to curb the foreign investors in real estate policies introduced in Australia.
According to local media in Australia, Westpac is not the first bank to refrain from lending money to overseas buyers. Commonwealth Bank of Australia (CBA), National Australia Bank (ANB) and Australia’s ANZ Different levels of loans for overseas buyers buy a house policy. This Westpac bank, along with its three other banking brands, will no longer provide home loans to overseas buyers as from April 26.
According to the policy, self-employed people who have full income from overseas can not get loans. Non-permanent residents and those holding temporary resident visas can not get loans. If the income of local residents has overseas income, the maximum loan amount can not exceed 70 %. In other words, including foreign students, migrant workers, tourists want to buy a house in Australia will be very difficult unless you do not need a loan to buy a house in full.
When the news came out, it set off a hot discussion among Chinese people. Some people think that going to Australia real estate speculators, all have “capital” to buy a house, and Australia still has a small bank or lender can loan to overseas investors, so the move may not inhibit overseas real estate speculation. Others think that this will affect overseas people who really need to solve the housing problem and want to continue living in Australia.
Canadian banks have similar rules. At the end of March this year, Canada’s Bank of Montreal (BMO) announced that it will implement the New Deal on April 8, 2016. For students with student visas, applying for a loan must be made by their parents and act as the principal owner of the property Primary Owner, while children can be co-owners.
Under the new rules, foreign students are required to apply jointly with their parents when applying for a loan and receive a mortgage after being audited by a credit specialist, up to a maximum of 65% of the mortgage loan. Foreign parents also need to personally sign their names in Canada.
The main reason for BMO’s introduction of this policy may be its assessment of the ability of overseas students to repay their loans. Although the banks know that the monthly contributions made by their students come from their parents, lending to students is still a high-risk activity.
According to BMO customer service introduction, this new policy is only for those who hold a student visa, for those who have a work visa, are not affected. When students have a certain degree of financial ability and repayment ability, parents can transfer the house to their children’s name.
According to the house price, the bank will examine the parents’ credit records and income proof of the students and decide whether they can pass the examination and approval.
So far it seems that only BMO Bank has adopted this rule and it is unclear whether other banks will follow up. The aim of the move seems to be different from Australia’s crackdown on overseas real estate investors.