Is my cash safer with a big bank?
Not necessarily. All of Australia's Big Four are Authorised Deposit-Taking Institution (ADI). But so are almost all the smaller banks, credit unions and digital banks. You can find more detailed information here.
In the unlikely event your lender goes bankrupt, it won't affect your ownership of the property as your loan account would pass to a new institution, who bought the assets of your now-defunct lender.
The only lenders who might not be covered by the bank guarantee scheme are very small neobanks, which are essentially financial start-ups. Most of these companies obtain a banking license or partner with someone who has one, and is an ADI. .
Hi Sir,
Me and my husband are both Australian citizen but now both working in overseas with overseas income. We have an existing mortgage loan with Westpac and now want to refinance the loan with cash out (for personal use). I have talked to Commonwealth bank but they require both my husband and myself to sign the documents in the branch in Australia. However, we are unable to come back to AU in the short period of time.
It seems that not many bank will accept application with overseas income.
Is there any other bank/financial institution will accept application for my case?
Looking forward to hearing from you.
Best Regards,
Kathy
Hi Kathy,
Thanks for getting in touch with Finder!
Yes, there are options to refinance your home while you are overseas. See our home loans for Australian expats guide.
Kindly note that each lender has its own approach to foreign income. Most Australian lenders will only accept a certain percentage of your foreign income, which allows a lender to protect itself against factors such as fluctuating exchange rates. Also, lenders accept major currencies such as British Pound Sterling, US Dollar, Euro and etc. You can see part of the page saying “How is foreign income treated?”
As a friendly reminder, review the eligibility criteria of the loan before applying to increase your chances of approval. Read up on the terms and conditions and product disclosure statement and contact the bank should you need any clarifications about the policy.
Hope this helps!
Best,
Nikki