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Buy to Let Abroad

See how expert guidance can help secure an overseas Buy-to-Let mortgage

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No impact on credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: November 22, 2021

Overseas Buy to Let mortgages

We gets lots of enquiries from people looking to purchase a buy to let investment in Europe or elsewhere in the world. It’s a great way of earning an income from rental fees as well as having an excuse to take a trip away.

For many people it can sometimes be more complicated than buying a property in the UK. That’s because every country has different rules, taxes and processes when it comes to property prices, not to mention at times a different language.

You’ll have a lot to consider if you’re buying a Buy to Let overseas property, but the good news is that the advisors we work with are experts when it comes to buy to let mortgages for overseas property.

To put your mind at ease, we’ve listed everything you’ll need to know as well where you can go for advice.

How can I get a buy to let mortgage abroad?

If you’re hoping to get a Buy to Let mortgage for property abroad, there are a few ways that you could raise the money.

  • International UK lenders
  • Raising funds on a UK property
  • International local lenders

International buy to let mortgages from UK lenders

There are international Buy to Let mortgages from lenders based in the UK,

These lenders can consider mortgages to UK residents who are buying abroad, and secure the mortgage on that property.

In general, as the laws and rules are different country to country, most UK lenders don’t offer this service. It tends to be lenders who have a base in that country already.

Raise capital on a property you already own

Another option is to raise enough funds on a property you already own in the UK (if you have the equity), to buy a home abroad outright.

Funds could be raised through –

Raising enough money to buy your Buy to Let overseas property without a mortgage could speed up the purchasing process. Some people may be in a position to buy a property overseas outright without having to remortgage to release equity on their current property.

This could be due to a recent sale of a property which has allowed them to invest.

However, many buyers do not have access to such an amount of money and so they consider a remortgage to buy another property.

If you are considering either of these options, you should seek advice from an overseas Buy to Let mortgage advisor who can assess whether either of these options would be affordable for you, based on your current financial situation and credit history.

If you can afford to remortgage or release equity from an existing property, a mortgage advisor can scour the market for the best interest rates and options for you.

Using an international lender

The final option is to use a local lender in the country you are buying in.

A benefit of this is that you can compare mortgage deals in the country that you’re buying in as well mortgage deals in the UK. Mortgage rates in some parts of Europe are lower than in the UK, which means that you could get a better deal.

Whether you are looking for a Spanish Buy to Let mortgage a Buy to Let mortgage in the USA, or a mortgage with an overseas lender elsewhere, we’ll match you with a specialist mortgage advisor with knowledge of that specific location.

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Will I need a bigger deposit for a Buy to Let mortgage for on property abroad?

Because overseas Buy to Let mortgages are seen as more of a risk for lenders, Buy to Let mortgages for overseas residents, and residents within the UK, do often require a higher deposit.

In some countries such as Spain, Buy to Let lenders will ask for 30% of the property price as a deposit.

In fact, in some countries, a non-refundable deposit is required to secure a property and is payable on the acceptance of an offer.

Because of this, before you hand over any deposit for a Buy to Let in Spain, the USACyprus or any other country, always consult legal advice from your solicitor as well as your mortgage advisor who can negotiate the terms in your contract.

How do lenders calculate my affordability for a Buy to Let overseas?

When assessing a mortgage application for a Buy to Let mortgage in Spain, or anywhere else in Europe and abroad, any lender will need to know whether the applicant can afford the mortgage repayments.

In the case of a Buy to Let mortgage application for an overseas property, the borrower will often have to provide evidence that the rental income will cover the mortgage payments.

They may also want to see evidence of other forms of income which could include savings, a pension, or income from your current employment. This is because in the event that you are unable to find a tenant, your other income can be used to pay your mortgage.

Of course, every lender uses their own criteria to calculate affordability, which is why seeking advice from an overseas Buy to Let overseas mortgage expert before applying can help give you a sense of which lenders will be likely to accept or reject you.

How much can you borrow for a BTL overseas mortgage?

When it comes to Buy to Let mortgages for overseas residents, most lenders will cap the amount they will lend you to 4.5x your annual income, although some will cap at 5.

In very exceptional circumstances, a handful of lenders may even consider loaning up to 6x your annual income. This is something usually offered to borrowers with a very good credit history and a higher income though.

For more information on this see our affordability section.

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Will bad credit affect an overseas Buy to Let mortgage application?

For Buy to Lets overseas, applicants with bad credit may find themselves subject to the criteria that is similar to that for residential mortgages.

However, because lenders view Buy to Lets in general as more of a risk, there may be fewer lenders to choose from. This could mean that as a buyer, you may be faced with unfavourable rates.

The buy to let brokers we work with are experts when it comes to finding mortgages with bad credit.

Give us a call today for the right advice and how to explore all your options.

What do overseas Buy to Let lenders view as “bad credit”?

Bad credit or ‘adverse credit’ is a term used to describe a less-than-perfect record of repaying credit commitments.

These are UK terms of course, in other countries (and languages) they may well be referred to differently.

Can you Buy to Let abroad with bad credit?

Yes, getting a Buy to Let mortgage abroad may be possible with bad credit in the right circumstances. There are some lenders who will approve your mortgage with defaults and others where there’s a been a default on a secured loan, which is a severe type of default to have on your credit file.

This again can vary country to country, where much depends on the severity of the incidence, how long ago it occurred and what the final outcome was.

Often in these cases, a larger deposit can improve the likelihood of being accepted for a mortgage, but this is not always the case, so the right advice is essential.

The best approach is to get help from someone knowledgeable about adverse credit and it can also be really helpful to check your credit history to establish any financial issues you may have on your report.

If you’re worried about adverse credit or just need some reassurance, one of the advisors we work with can offer you advice. If you are based in the UK, you can check your own credit history at CheckMyFile, Credit Monitor (Call Credit) or Experian.

How will a Buy to Let overseas affect my tax?

When buying an overseas property there are many financial aspects that you should consider. One of the most common queries we receive is about tax and how much a Buy to Let landlord will have to pay when purchasing an overseas property.

We’re also asked what happens after the purchase. A lot of landlords aim to build a property portfolio both overseas and in the UK – but how does that affect the tax they pay?

Below are some common scenarios that we’ve come across when helping homeowners over the years.

Are there any tax implications to consider with Buy to Let overseas

If you already own a property in the UK and are buying a Buy to Let property abroad, the related costs will fall under the buying laws of that country. This would mean that neither Stamp Duty nor the 3% surcharge on Stamp Duty in the UK is likely to be charged.

That’s not to say that there won’t be other costs as you may be liable for foreign taxes such as purchase tax and income tax on rents. Each country has their own rules and regulations on tax when buying a property, so before you make a purchase, always take advice from a mortgage expert in the UK and a local tax expert in the country you are buying the property in.

Do I have to pay income tax on my Buy to Let overseas property?

If you earn anything from outside England, Scotland, Wales and Northern Ireland it is considered as foreign earnings and you may need to declare this as income tax.

If you’re not a UK resident and your permanent home is abroad, you likely won’t have to pay UK tax on your foreign income.

How to manage your Buy to Let abroad property

In order to ensure that your Buy to Let property is habitable for tenants and that any problems with the building or tenants are taken care of, you will need to manage your property.

There are two ways that you can manage your Buy to Let property:

  • Manage it yourself
  • Find a property management agency

Self-managing your overseas BTLs

Managing the property yourself will save you money on agency fees but it does leave the responsibility of finding new tenants down to you. It can also be time-consuming, especially if you don’t speak the language or have more than one property.

Many people also struggle to visit their property often so this is something to consider.

For example, if you’re living in the UK, a Buy to Let property in South Africa may be more difficult to keep up with versus a Buy to Let in Amsterdam.

Using an agency

Some Buy to Let overseas landlords choose to pay a property management agency as they have experience in rental properties and the problems that can arise with renting.

A typical property management agency will charge 20% of your yearly rental income to ensure that your property is looked after, rental payments are made on time and that there is most importantly, a tenant in the property.

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How to find tenants for a Buy to Let property abroad

Of course, the easiest way is to use a local agent, who can list, recruit and manage any tenants on your behalf.

If you decide that you don’t want to hire a property management agency/lettings agent who can help you find tenants, there are things you can do yourself to market your Buy to Let Overseas property.

  • Use your own social media to market to your friends and family
  • Create a Facebook business page to promote your property/properties
  • Create your own website
  • Advertise in local newspapers
  • Advertise on rural tourism websites
  • Ask local businesses if you can leave flyers in their shop/restaurant to attract tourists
  • Attach flyers to local notice boards

Other things to consider when buying a Buy to Let abroad

  • Ensure your lawyer is fluent in both English and the local language, as some countries won’t produce the paperwork in English
  • Also, make sure that your lawyer understands property law in the country you’re planning on buying in
  • Keep an eye on the exchange rates as even a small change could drastically affect the value of your property or the profit you receive from rent.

What happens if things go wrong when buying a Buy to Let overseas?

An important factor to consider when buying a Buy to Let property abroad is that it is not regulated by the Financial Conduct Authority (FCA.) This means that you won’t be protected by the Financial Ombudsman Service or Financial Services Compensation Scheme if things go wrong.

There may be other authorities in other countries offering protection to investors from overseas, so this is something for you to speak to one of the expert advisors we work with about.

Should I get advice before applying for a Buy to Let property abroad?

Yes! We always recommend getting advice before applying for a Buy to Let abroad mortgage.

The legal processes abroad can be very different, so always seek independent legal advice from a specialist from the country you’re buying in as well as one in the UK.

This can help avoid any delays throughout the purchasing process because different countries may also have varying rules on lending to foreign buyers.

As the process can sometimes be confusing and, as a buyer, you may not speak the language of the country you are buying in, it can be really helpful to have an advisor who understands the property laws and language.

Researching Buy to Let mortgages for an overseas property can be really time-consuming and stressful but a mortgage advisor can do all of this for you. They will dedicate their time to research the best lenders based on your circumstances and can assist you through the process of applying for a mortgage whether that be in the UK or overseas.

So whether you’re dreaming of Buy to Let villas in Florida, or wondering where the best places to Buy to Let in Spain are, we can help.

Impartial and helpful advice can really put your mind at ease, especially at a time that could feel stressful and daunting.

Where can you find the best BTL overseas lender?

For access to the best overseas BTL rates, contact a specialist mortgage broker who has experience in overseeing and handling mortgages abroad.

A professional who works in such a niche area will be able to identify the best lenders quickly to compare interest rates and conditions of mortgage offers.

The brokers we work with are able to negotiate international Buy to Let mortgages with high street banks such as Natwest, RBS, Barclays and more whilst also having access to more specialist lenders too.

What are the more popular countries for Buy to let?

Choosing a place for a buy to let overseas is a combination of affordability, distance, potential returns and cultural factors. These are some of the most popular international BTL products the brokers we work with can arrange.

Buy to let mortgages in Spain

The weather is great, the cost of properties are relatively low and it’s only a few hours from the UK.

You can read more about buying Spanish properties in our guide.

Buy to Let mortgages in the USA

The natives speak English (after a fashion), it has a strong economy and, at the time of writing, a shortage of rental accommodation. The brokers we work with have arranged buy to let mortgages in Florida, buy to let mortgages in New York, and BTL deals in a number of other US states.

Read more about American mortgages.

French buy to let mortgages

It’s just across the channel, so travel times are shorter. The food is great and there are some bargains to be had as long as you’re outside of Paris.

Read more about buying French property in our guide.

Buy to Let mortgages in Bulgaria

One of the lowest costs of living in Europe and some real bargains to be had in some of the most beautiful countrysides.

Can I get advice on BTL anywhere in the world?

Yes … well, almost anywhere.

The advisors we work with are experts in Buy to Let mortgages in countries all over the globe.

They can provide you with the right advice on buy to let in:

  • New Zealand
  • Dubai
  • South africa
  • Portugal
  • Gran Canaria
  • Netherlands
  • Tenerife
  • Australia
  • Cyprus
  • Turkey
  • Portugal
  • Bulgaria
  • Singapore
  • Caribbean
  • Kenya
  • Menorca

Speak to an overseas buy to let mortgage expert today

Call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry here. Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  – We don’t change a fee and there’s no obligation or marks on your credit rating.

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At OnlineMortgageAdvisor we know that everyone's circumstances are different. That's why we only work with expert brokers who have a proven track record in securing mortgage approvals

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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