Phil-UK

Hi,

Has anyone gotten an Oz mortgage while still having a UK mortgage ?

We are thinking about renting out our property in the UK when we move to Oz and just wondered what would happen when we apply for a new mortgage in Oz.

I know in the UK if you have an existing mortgage your salary has to be sufficient to cover both mortages, as an example:

Existing mortgage = £70,000
Salary = £30,000
Rental income = £6,000

If we assume 4 x income
£36,000 x 4 = £144,000
less existing mortgage £144,000 - £70,000 = £74,000

But if they were to allow the rental income to cancel out your existing mortgage, as long as the rent covers the mortgage payment you would get a much better mortgage.

mortgage of £30,000 x 4 = £120,000 (instead of £74,000)

Do you know if they do this in Oz ?

I have heard that a few banks are now doing this in the UK, as long as your rent covers the mortgage payment they will discount it. So if I got a job in Oz for say $60K would I get a mortgage for approx. $240K (4 x) or would they add my salary to the rental income and then deduct the UK mortgage from the figure ?

Looking forward to your replies.

Phil

Phil-UK

Bump...

Quokka

don't tell them about the uk mortgage

Phil-UK

wouldn't that be classed as fraud, i.e. illegal ?

Wave the Sails

Suggest you contact Nik Silsby (British Expat) here in Perth. He works for a Mortgage Brokerage Company called the Loans Cafe and has been incredibly helpful to us. Was recommended to us by someone on here.

Email him the above thread and I'm sure you'll have a quick answer

[email protected]

HTH

Phil-UK

Thanks for that, I'll do that.

Phil-UK

bump.

MrsDagboy

Hi Phil,

Pretty sure it would be the latter, rent is considered income, but they will definitely take the amount owing on your UK mortgage off as expenditure.

And yes, I think if you didnt declare the UK mortgage that could be considered as fraud (or whatever they classify it as when you lie on a financial statement. Technical me - yep )

(PS. don't know that they work on the x4 rule here when you get a mortgage, you're best off going to one of the bank sites & using one of their calculators)

Briz-chick

We investigated doing this as well.

We were in contact with an excellent sydney-based mortgage adviser called Kym Rampal at rightloans.com.au. We too want to keep our flat in the UK and rent it out, while buying a home in oz.

We applied for a Commonwealth Bank home loan and the application form asked us to declare any rental income we received, our assets (eg the UK flat) and any other mortgages we have and how much owing. They pieced all of the info together, saw the UK rent would cover the UK mortgage, and approved the home loan.

The based our affordibility of the Oz home loan on the fact that we both have stable jobs in the UK and earn enough to cover the payments of our proposed home loan.

We didn't go through with it in the end, but I know it's possible!

Phil-UK

Thanks MrsDagboy and Briz-chick that's very helpful.

I was hoping if the rent covers the mortgage it will sort of cancel it out and allow the usual mortgage figure based on salary in Oz.

I'll try out some calculators and see what it comes up with.

Thanks again

Phil