Overseas Property Financing

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Overseas Property (UK)

The United Kingdom is one of the simplest places to make property investments in, thanks to few restrictions on foreign buyers and its tight regulations to protect buyers. Furthermore, with a consistently increasing demand and a shortage of supply, property is the United Kingdom’s strongest asset class. The UK property market is a reputable, stable investment option that Singaporeans have been investing in for decades.

It gets even better. With a low entry point starting from £95,000 for luxury city apartments, the UK is an ideal choice for property investors of all sizes, investment portfolios and experience. All you need, is an ideal loan. At EasyRates, we partner with banks/institutions in Singapore and even in the UK that can finance your property investments in UK without utilising the Total Debt Servicing Ratio (TDSR)

By using our loan comparison tool, you can access and compare offers from all the local banks. In seconds, you can identify the perfect overseas property loan for you.

Overseas Property (Australia)

Australia is fast becoming a favourite property investment locale amongst Singaporeans, buoyed by favourable exchange rates, affordable property prices and attractive rental yields of 5 to 6 per cent. Geographically, Australia’s proximity to Singapore means visiting potential investment property is only a short flight away.

With the stability of the Australia government and economy, Singaporeans are seizing the opportunity to make intelligent investments in Australian property. What you need, is an ideal loan. At EasyRates, we partner with banks/institutions in Singapore and even in Australia that can finance your property investments in Australia with options such as interest-only loans and loans with no Total Debt Servicing Ratio Calculations. (TDSR)

By using our loan comparison tool, you can access and compare offers from all the local banks. In seconds, you can identify the perfect overseas property loan for you.

Beginner's Mistakes

Overseas property ownership opens up a whole net of exciting opportunities and can either provide a relaxing holiday home or become a profitable venture. When investing in overseas property, be aware of country-specific regulations so you can maximise your investment while keeping in line with local laws and regulations.

Most importantly, avoid these common mistakes:

Common Beginners’ Mistakes

1. Failing to check the regulations on foreign property ownership in the chosen country. Most governments impose certain restrictions on ownership of properties by non-citizens.
2. Neglecting to ensure if the lending bank offers transatlantic loans on overseas properties in the chosen country.
3. Overlooking the details of the application process in the chosen country. Every country has its own unique bureaucratic system.
4. Not properly calculating all the fees involved. There may be stamp duties, taxes, transaction costs and other fees which may vary from country to country.
5. Not taking into account foreign exchange risks. As this is an overseas transaction, you will be exposed to the fluctuations in foreign currency exchange rates.
6. Forgetting to hedge against shifts in interest/mortgage rates.
7. Failing to check the condition of the property before purchasing. If you are unable to personally conduct these checks, get a trusted, knowledgeable third party to help.
8. Not considering your resale options. Be aware of any resale restrictions, so you can make an accurate projection of your property’s resale value and demand.
9. In case a dispute resolution is required, you need to be aware of all relevant laws that apply to your transaction and find out which jurisdiction the dispute resolution falls under.
10. Not asking for advice. For friendly, professional advice on overseas property loans, speak with us. We’ll be glad to help.

Frequently Asked Questions (FAQ)

Is it better to borrow from my local bank or the overseas bank?

This depends on the different loan packages offered by the banks. Compare your options and determine which loan terms are best suited to your needs. For Overseas banks, TDSR will not be affected or used in the calculation of your affordability. It is best to discuss this with an overseas property loan professional. Do contact us, we will be happy to provide assistance.

What documents will I need to provide the lending bank?

This varies according to the requirements by the lending bank and the regulations of the country the property is in. Once you have contacted the loan provider (via EasyRates), they will inform you of what documentation is needed.

How much can I borrow?

There will be a minimum and maximum loan amount that will vary according to the lending bank. The maximum loan amount is typically subject to your individual circumstance, such as your ability to service the loan, your credit rating, the value of the security provided, etc. For Banks based in Singapore, TDSR applies

How is the value of the property evaluated?

The value of a property can be calculated using the following approaches:

The sales comparison approach: This looks at the prices of similar properties in past transactions to give an approximate value
The capital asset pricing model: This compares the property’s potential rental income with a zero-risk investment (i.e. such as a government bond)
The income approach: This compares the property’s potential rental income with the property’s initial investment cost
The cost approach: This estimates the property value by adding up the cost of its components – the market value of the land plus what it would cost to replace the building – while allowing for depreciation costs (the decline in value of the building due to wear and tear over time).

What are the interest rates?

The interest rate is determined by the lending bank, the loan size and the currency in which the loan is made out. Once you have contacted the lending bank (via EasyRates), they will be able to update you on current interest rates.

What are the “miscellaneous” costs involved?

Some of the more common costs would include document preparation fees, processing charges, legal costs, agent fees, valuation fees, government levies, etc. The actual costs involved would vary according to application requirements and property location.

Do I need to hire a local proxy to make the purchase?

This is dependent on the regulations of the country the property is located. You may need to hire a local agent or lawyer to research on the property title, insurance, etc. An accountant might be useful as well to help you minimise and calculate taxes payable.

How do I manage the exchange rate risk?

Unless you have a strong view of the direction of the currency market, It is recommended that you borrow in your property location’s local currency in order to reduce exposure to exchange rate risk. If that is not possible, there are various products that can help you manage foreign exchange risks such as forward foreign exchange contracts and currency switches. Once you have contacted the lending bank (via EasyRates), they will be able to further advise you on the risk exposure.