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Checked 7 October 2026

How lenders assess foreign income for an Australian home loan

Lenders convert foreign income into Australian dollars and then count only part of it, so pay that looks like AUD 150,000 on paper can be assessed at AUD 90,000 or at the full amount. Brokers describe anything from about 60% to 100% being counted, depending on the lender, the currency and your residency status (checked October 2026). No official source sets one percentage.

No single percentage applies. Brokers report 60% to 100% for foreign salary. APRA's practice guide, which says it creates no enforceable requirements, describes at least a 20% discount on most non-salary income and gives no figure for offshore pay.

The steps in an assessment

Lenders have their own formulas, but the stages brokers and regulators describe are similar:

  1. Confirm what kind of income it is. Base salary is treated differently from bonuses, allowances, overtime, rent or investment income.
  2. Convert to Australian dollars. Unloan's general guide (Unloan is a division of CommBank) says lenders often use their own exchange rates, which are often lower than market rates.
  3. Apply a discount. This is the "shading" or "haircut". It varies by lender and currency.
  4. Adjust for tax. Some lenders work from Australian tax rates, not those of the country you live in.
  5. Subtract commitments and living costs. APRA's guide expects lenders to verify existing debts and use the greater of declared living expenses or a scaled benchmark index.
  6. Test against a higher interest rate. APRA's guide describes a buffer over the loan's interest rate. It is not specific to foreign income.

For the legal frame, ASIC says lenders must make reasonable inquiries about your financial situation and requirements, take reasonable steps to verify your financial situation, and assess that the loan is not unsuitable.

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How much of it gets counted

The broker pages disagree, which is the main point. Home Loan Experts says some lenders use only 60% to 90% of foreign income, while its best lenders use 100% for applicants in a strong financial position. Hunter Galloway says lenders typically count around 60% to 80% once converted. Odin Mortgage publishes two tiers, with 100% counted in the first and 60% to 80% in the second. Odin's separate non-resident page says foreign income is generally discounted by 20% to 40% for currency risk. These are broker statements, not lender policy. The foreign income guide sets out the currency groupings these brokers describe.

APRA's guide says, in its section on foreign-currency loans, that discounting offshore income is good practice when assessing servicing capacity. It gives no percentage.

A worked example

The rates and percentages below are made up. They show how the steps combine.

Salary USD 97,500 a year, and a bonus of USD 13,000. Illustrative rate: USD 0.65 per AUD.

  • Salary in AUD: 97,500 ÷ 0.65 = AUD 150,000
  • Bonus in AUD: 13,000 ÷ 0.65 = AUD 20,000
Lender treatmentSalary countedBonus countedTotal counted
100% of both150,00020,000170,000
80% of both120,00016,000136,000
60% of both90,00012,000102,000

The gap between the first and last row is AUD 68,000 (170,000 minus 102,000). The lender then subtracts debts and living costs from the counted figure, so the effect on how much you can borrow is not a straight line. If a lender's own conversion rate is 0.68 rather than 0.65, the same USD 97,500 converts to about AUD 143,382 (97,500 ÷ 0.68), before any discount.

Bonuses and other income

APRA's guide says prudent lenders apply discounts of at least 20% to most types of non-salary income, and more in some cases. Home Loan Experts says lenders will use 80% or less of variable income and that a two-year history is typically required. APRA also lists examples where a lender may use the lowest documented amount over several years, or an average with a 20% discount.

Whether a lender stacks a currency discount on top of an income-type discount is a lender decision, so ask.

Tax rates

Unloan's general guide says some lenders assess you on Australian tax rates, which can cut borrowing power if you live somewhere with low tax, and it names Singapore and the UAE as examples. Home Loan Experts says other lenders use the foreign tax rates, which can allow more borrowing. Ask which method each lender uses before comparing outcomes.

What lenders ask you to prove

APRA's guide lists the usual verification: confirming employment status, recent payslips, a letter from the employer or accountant, tax assessments and returns, bank statements showing salary credits, and a check of your credit history. Home Loan Experts lists a letter from your employer, your employment contract, two payslips, three months of bank statements and the last financial year's tax return. Odin lists six months of payslips and bank statements and two years of tax returns. Documents not in English need a certified translation, according to Home Loan Experts. The certification guide covers who can do that, and the documents guide has the wider list. The broker questions guide is a place to start on what to ask.

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Frequently asked questions

Does a lender count 100% of my foreign income?

Some do, some do not. Home Loan Experts says its best lenders use 100% for strong applicants, while Hunter Galloway reports lenders typically count 60% to 80%. Percentages are set lender by lender and can change. Ask each lender, or your broker, for the figure they apply to your currency.

Is my bonus counted?

Often at a lower rate than salary. APRA's guide says prudent lenders apply discounts of at least 20% to most non-salary income, and Home Loan Experts says lenders use 80% or less of variable income and usually want a two-year history. A new bonus with no history may be given little or no weight.

Does it matter which currency I am paid in?

Yes, according to brokers. Odin groups currencies into tiers and counts a different share for each, and Hunter Galloway lists major currencies as commonly shaded to around 60% to 80%. The treatment of any particular currency is lender policy, so check the lender's list.

Will the lender use my country's tax rates?

It depends on the lender. Unloan's guide says some use Australian tax rates, and Home Loan Experts says others use foreign tax rates. The choice can change the after-tax income the lender works from, so ask which one applies before you compare lenders.

Do foreign debts count?

APRA's guide says lenders would verify existing debt commitments and look for undeclared ones. How a lender treats a debt held overseas is its own policy, so list every commitment, in any country, when you apply.

Sources

Checked 7 October 2026.

Expat Finance is an independent guide. It is not a lender, mortgage broker or credit provider, it does not hold an Australian credit licence, and it does not give credit, legal, tax or migration advice. It is not affiliated with any bank, the ATO or the Foreign Investment Review Board. General information only, not legal, tax, migration or financial advice.