Foreign income and Australian lenders, explained

By Chez Richter, Senior Mortgage Broker at Hypothèque · Updated 2026-11-05 · 6 min read

Your overseas pay packet will almost never count dollar for dollar with an Australian lender. Knowing how it gets trimmed, and why, is the difference between a realistic budget and a nasty surprise at pre-approval.

The short version

Lenders only accept certain currencies; major ones such as USD, GBP, EUR, SGD, NZD and HKD are the most commonly accepted [1][2].
Many lenders count only part of your foreign income, often around 80% according to brokers quoted by Finder, to allow for currency swings [2].
They usually convert at their own exchange rate, which tends to be less favourable than the market rate [1].
Some lenders work out your tax using Australian rates, not the rate where you live [1], which hits people in low-tax countries hardest.
Plan on six months of bank statements, recent payslips and an employment letter as a starting point [2].

Why lenders don't take your salary at face value

From a lender's point of view, your foreign salary carries three risks a Perth salary doesn't.

Currency risk. Your repayments are in Australian dollars. If the Aussie dollar rises against the currency you're paid in, the same salary covers less of your mortgage. Lenders protect themselves by discounting the income and using conservative conversion rates [1][2].

Verification risk. An Australian lender can check a local employer and a local tax return fairly easily. A payslip from a company in Seoul or a tax notice from the Netherlands is harder to verify, so the documentation bar goes up.

Job and visa risk. Your right to work overseas usually depends on a visa. If the job ends, the visa may go with it. Lenders want proof you can legally live and work where you are, which is why passport and visa copies are standard [2].

Then the usual Australian safeguards still apply on top. APRA expects banks to test that you could repay at least 3 percentage points above your actual loan rate [3], and lenders must make reasonable enquiries about your income and expenses before lending.

Which currencies do lenders accept?

There's no single official list. Each lender sets its own. Finder lists the following as commonly accepted: British pound, US dollar, euro, Singapore dollar, New Zealand dollar, Canadian dollar, Hong Kong dollar, Japanese yen, Chinese yuan and UAE dirham [2]. Unloan, the Commonwealth Bank's online lender, mentions USD, EUR, GBP and NZD among the common ones and says others may be accepted under certain conditions [1].

Where you're paid	How it tends to be viewed	What to expect
Major currency (USD, GBP, EUR, SGD, HKD, NZD, CAD, JPY)	Widely accepted [2]	Income discount and lender exchange rate still apply
Gulf currencies such as the UAE dirham	Accepted by some lenders [2]	Questions about tax and allowances are common
Less traded currencies	Often declined or assessed case by case [1]	Smaller lender choice, possibly a larger deposit
Mixed: salary abroad, rent in Australia	Each income stream assessed separately	Rent is also usually discounted

How a lender might rework your salary

The exact formula varies by lender and changes over time, so treat the example below as an illustration of the steps, not a quote. All figures are made up to show the logic.

Start with your gross salary. Say you earn US$120,000 a year.
Convert at the lender's rate. The lender uses its own rate, which may be below the market rate [1].
Apply the foreign income discount. If a lender counts 80% of your income, the converted figure drops by a fifth. Some lenders apply this to gross income, others to net [2].
Apply tax. Some lenders calculate tax as if you paid Australian rates [1]. If you actually pay little or no tax where you live, this step costs you on paper.
Subtract your living costs and debts. Your overseas rent, school fees, car lease and credit card limits all come off.
Test against the buffered rate. Whatever is left must cover repayments calculated at your loan rate plus at least 3 percentage points [3].

Every step nudges your borrowing power down. That's why expats who earn well are often surprised at the number they get back. Because each lender runs these steps differently, comparing several is worth the effort; if you use a mortgage broker, they must act in your best interests when suggesting a loan [5].

Bonuses, allowances and packages

Expat pay often comes as a package: base salary, housing allowance, school fees, car, flights home, bonuses. Lenders generally look hardest at the base salary because it's the most reliable. Allowances and bonuses may be counted partly, only with a track record, or not at all, depending on the lender. If a big chunk of your income is variable, bring evidence of at least two years of history and the employer's letter spelling out what's guaranteed.

Self-employed abroad

This is the hardest category. Finder notes that most lenders no longer accept self-employed foreign income [2], and Unloan says self-employed applicants may need a larger deposit [1]. If you run your own business in Bali or consult out of Berlin, expect fewer options and more questions.

The paperwork pack

Get this ready before you apply. Translations should be certified if your documents aren't in English.

Document	Typical expectation
Payslips	Your most recent ones, usually the last two [2]
Employment letter	On letterhead: role, start date, salary, permanent or contract, probation finished
Bank statements	About six months, showing salary landing [2]
Passport and visa	Proving citizenship and your right to work abroad [2]
Tax returns or notices	From your country of residence, especially if you earn variable income
Australian bank account	Some lenders want funds held in an Australian account [1]
Credit report	Know what's on your Australian file before the lender does

Many lenders also do an employment check with your employer, so give HR a heads-up [2].

Ways to strengthen your income picture

Wait out probation. Most lenders prefer you've finished it.
Pay down or close cards. Lenders often count the limit, not the balance.
Show regular saving. Six months of steady transfers to savings tells a story.
Keep Australian income visible. If you already earn rent back home, have the lease and rental statements ready; it counts too, though usually discounted.
Think about your tax position. As a foreign resident, Australian rental income is taxed from the first dollar at 30% up to A$135,000 in 2025–26, with no tax-free threshold [4]. That changes the after-tax cash flow lenders and you should be modelling.
Watch your exchange rate exposure. Moving deposit money home in one hit can cost you. Our guide on sending money home compares the options.

A note on borrowing in foreign currency

Some expats ask about taking the loan in their earning currency. This is a niche product and policies vary; Unloan, for example, doesn't accept foreign-currency repayments [1]. For most people the standard path is an Australian-dollar loan with repayments funded from an Australian account. If you go down the foreign-currency route, make sure you understand how a shift in exchange rates changes what you owe in Australian dollar terms.

Foreign income and Australian lenders: why your salary shrinks on paper