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International mortgages for foreign properties

Find out how to get a mortgage to buy property abroad.

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Mortgages for property abroad

We have so many people asking us about UK mortgages for property abroad. Fortunately, the advisors we work with are experts when it comes to finding the right mortgage for a property overseas, even if you’ve had bad credit.

However, moving abroad is a huge step and without knowing the local language, getting a mortgage for a house abroad can come with unique hurdles.

To help make your overseas mortgage process easier, we’ve created this guide with lots of helpful tips, including how to get a mortgage for a home abroad as well as  where you can turn to for advice.

If you would like to kickstart your overseas mortgage application, make an enquiry here.

We’ll put you in touch with an expert and get you the right advice to move forward with your application and get the best deal.


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Can you get a mortgage for an overseas property?

Yes, this could be possible!

As a foreigner, you may find that in some countries, lenders can be reluctant to lend to you. Therefore, getting an international mortgage can take a little longer, but it’s doable.

As well as this, in certain territories, you may also be required to pay a larger deposit to secure your overseas property.

That being said, there are specialist lenders across the world, as well as lenders in the UK, that offer mortgages for property abroad, provided you meet their criteria.

Each lender will have varying criteria, meaning that whilst you may be rejected by one lender, you may be approved by another.

This can make it difficult to predict whether you’ll be approved or not, so speak to a mortgage broker who can guide you and source lenders that are more likely to accept you as a borrower.


How to get an international mortgage for a property abroad

Find an international broker

To avoid any mortgage rejections on your credit file, work with one of the mortgage brokers we work with who has negotiated and managed international mortgages before.

An experienced broker will:

  • Find the best available rates
  • Negotiate the terms of your mortgage for you
  • Handle any paperwork
  • Arrange translations if needed
  • Check any contracts thoroughly before you sign

Find out if you’re eligible for an international mortgage

International mortgage lenders tend to focus heavily on income as opposed to the amount of your deposit.

Unlike the UK, some international mortgage lenders have rules regarding how much debt a person can have when they take out a mortgage.

For example, in some countries such as Malta, any debts, including your future mortgage payments, cannot be more than 35% of your total income.

Many people apply to lenders without knowing their eligibility, which can result in wasted money in application fees as well as rejections on their credit file.

To filter out any incompatible lenders and find one that is more likely to approve your mortgage application, speak to a mortgage broker.


Prepare your documents in advance

To process your mortgage application, overseas property mortgage lenders may ask for your:

  • Passport, driving licence or other means of ID
  • Proof of address
  • Proof of income

If you are self employed you may also need:

  • Your most recent audited accounts
  • 6-12 months’ of personal and business bank statements

Find a property

Once a lender approves you for a foreign mortgage, you should receive a mortgage in principle.

Once you have this, you can start to look at local properties and get a feel for which location is best suited to you.


How much could you borrow?

Overseas banks generally promote repayment mortgages rather than interest only, with mortgage lengths of 20-25 years, similar to that of the UK.

The amount you can borrow on a mortgage for an overseas property will vary depending on the country, your choice of lender and most importantly, your circumstances.

The average Loan to value (LTV) tends to be around 75% but again, this will differ depending on the above factors.

For more information on how much you could borrow with an international mortgage speak to an advisor.


Top tips for buying foreign property abroad

Every country has different rules, taxes and processes when it comes to property, not to mention a different language.

This can be daunting as foreign buyer so seek advice from one of the expert advisors we work with for the right advice.


Check the local property laws

The laws regarding property can differ heavily across the globe and not adhering to them can result in heavy penalties and even legal action.

For example, in Turkey, non-natives are forbidden to buy property within military forbidden zones and security zones.

In Sweden, landlords are forbidden to ask for rental deposits. As well as this, if a landlord decides to increase the rent, the tenant has the right to appeal to the Swedish Rent Tribunal.

Because of the differing laws, it is crucial that you work with a solicitor who is registered with the Law Society in the UK. They should also specialise in international transactions and property conveyancing.


Think about the tax implications

A mistake or a misunderstanding of how much tax or what tax you’re required to pay could end up costing you a lot of money in missed payments and fees.

It’s also important to understand how buying a foreign property could affect how much tax you pay in both the UK and the country you are buying in.

Because of this, you should work with a mortgage advisor who a good understanding on the tax requirements in the country you are buying in as well as a proven history of handling international mortgages.


Research the planning permission you might need

The type of planning permission or license you need for any changes to your property will depend on the work you plan to do.

In the majority of countries, formal authorisation is required for all new construction works, whether that be to an existing building or for a completely new structure.

In some countries such as Spain, even small external repairs such as new windows or doorways will require a works license.

Carrying out any work without the correct permissions could result in heavy fines or lead to prosecution so always check with your solicitor who can read through your paperwork for you.

You should check to see what future development plans are in place by local authorities when looking at properties because in certain countries, if part of your property needs to be moved or knocked down to make way for say, a road, there’s no right to appeal this and you may even have to pay for the works yourself.


How to finance an overseas mortgage

There are a number of financing options available to overseas buyers which may be suitable for you.

These include:

  • Using an overseas lender
  • Using a UK based lender
  • Raise capital on a property you already own

International mortgage providers

Because overseas lenders won’t have access to your UK credit file, it can take longer for them to establish whether or not you have bad credit and pose a risk to them.

You may also require a larger, non- refundable deposit for your mortgage with an overseas lender, depending on the country and their laws.

Because of this, always have your mortgage broker thoroughly check your paperwork and contract before you hand over any money.


UK mortgage to buy property abroad

Most UK high street banks offer UK mortgages for homes abroad. This can be helpful for applicants who do not speak the native language. Santander, for example, have a very large presence in Spain.

Not only can help to avoid any document translation issues but it could also help to save money on any translation fees.

That being said, you may find that buying foreign property through a bank in the UK can be more be more expensive.

Furthermore, mortgage lenders in the UK can (in some cases) lack local market expertise. This can result in inaccurate valuations and therefore lower loan to value (LTV) rates.

To help avoid this, speak to a broker who has experience with managing international  mortgages. They will have a clearer insight into the current property values in the area you are buying as well as which lenders offer the cheapest rates.


Remortgaging to buy property abroad

In order to raise the money needed to buy an overseas property, you may consider remortgaging a property you currently own.

Often the more equity you own in the property, the more you can borrow.

Some investors use the equity in their current property to it down a larger deposit for their overseas property, whilst others have enough equity to buy the second property outright.

This is a risky option and should only be considered if you are certain that you can afford both your remortgage payments and the upkeep or your new property.

Before proceeding with an overseas second home mortgage, seek financial advice.

A mortgage broker can calculate your affordability and then can research the market to find you the best remortgaging deals.

Contact an advisor here for more information.


Can you remortgage an overseas property?

After living overseas and establishing some roots, some homeowners decide to remortgage their current overseas property in order to buy a second property abroad.

However, it can be more difficult to remortgage an international property in some countries as these types of mortgage products, including Equity Release, are less heard of.

Many lenders see remortgage products as more risky and prefer to stick to standard repayment mortgages.

That being said, remortgaging an overseas property may be possible in the right circumstances as there are lenders who are more willing to offer this as a finance option.

Speak to an advisor  to discuss your remortgaging options.


Can you get a Buy to let mortgage for an overseas property?

Buy to Let mortgages can be more difficult to obtain as lenders see the risk of mortgage defaults as much higher.

That being said, there may be lenders who will consider lending in the right circumstances.

Some may require larger deposits of up to 40% whilst others may require your income to be sufficient enough that you are able to afford your Spanish BTL mortgage without rental income, should you not be able to find tenants.


FAQs

Can older borrowers get a mortgage for holiday home abroad?

The maximum age that someone can get a mortgage differs from country to country as some lenders will want to ensure that the borrower can afford their mortgage, despite living on a pension or from their retirement funds.

The majority of lenders will ask for proof of income to calculate affordability, whether that be from a pension, savings or benefits.

There are lenders that specialise in mortgages for retired or older borrowers and you may find that these offer more reasonable interest rates and terms.

Make an enquiry and we’ll refer you to one of the experts for the right advice.


What happens to my mortgage if I move abroad?

If you have a mortgaged property in the UK but then decide to move abroad, you are still legally required to pay your mortgage on time and in full.

The terms and conditions of your UK mortgage are still legally binding, despite you no longer living in the country.

Some homeowners decide to rent their UK property out whilst they live abroad, which can be a great way to earn income for your remaining mortgage payments.

If you decide you would like to do this, you will need to register with the Non-resident Landlord Scheme.


Can you get a commercial mortgage for an overseas property?

Many expats buy commercial property abroad for business ventures including bars, restaurants or shops.

Although commercial mortgages can be harder to obtain as a foreigner in some countries, there may be international mortgage companies that offer competitive mortgage rates to suit you.

A top tip is to check beforehand whether the business has any undisclosed debts as well as any pending legal action.

It can also be helpful to open a bank account in the country you are purchasing your foreign commercial property in. This makes it easier to keep your business accounts separate from your own, especially when paying wages or bills.

Check out our guide to commercial mortgages for more information.


Should you use an overseas mortgage calculator?

Although online mortgage calculators, found on many financial websites, can provide a quick estimate, they can’t take all factors that may affect your mortgage into consideration.

This is because a calculator doesn’t factor in that each lender will assess a borrower differently.

This leaves many people confused or disheartened because they receive an inaccurate quote.

Speak to a specialist that we work with for a clearer understanding of how a mortgage for an international property will financially impact you.


Get the right advice

We understand that getting a mortgage for a  property abroad can be overwhelming but with the professional help of one of the expert mortgage brokers we work with, it doesn’t have to be.

Inaccurate advice could cost you money and in some cases could even result in your overseas mortgage application being rejected.

To prevent misinformation, we carefully vet every broker before deciding to work with them. Not only do they have to be reputable and experienced brokers but they also have to be OMA accredited.


Find the best overseas mortgage rates

Researching and comparing the current international mortgage rates can be really time consuming and stressful.

The advisors we work can do this on your behalf. They have access to hundreds of local overseas mortgage lenders as well as lenders in the UK and have successfully helped customers find the most favourable rates on overseas mortgage products including…

  • HSBC: Has a worldwide network and specialises in properties in territories including Canada, the USA and Hong Kong.
  • Santander: Specialise in mortgages for properties in Spain, and the advisors we work with have been known to land broker-exclusive deals with them.
  • Barclays: Overseas mortgages are available to Barclays International Banking customers looking to borrow £500,000 or more, with at least £25,000 (or currency equivalent) to deposit and maintain across their accounts.
  • Natwest: Natwest International offers mortgages for Jersey, Guernsey, Gibraltar and the Isle of Man.
  • Halifax: Halifax do not lend internationally, but Lloyds (who are part of the same group) do – see below for more information.
  • Lloyds: Lends internationally in territories including the US, Canada, Hong Kong, Australia and Singapore.
  • Skipton: A Channel Islands-based lender which specialises in expat mortgages.
  • And many more

With a huge range of lenders to choose from, it’s difficult to know which one to turn to. But the good news is that the advisors we work with have whole-of-market knowledge and can find you the best international mortgage loans and interest rates.


Speak to an overseas mortgage expert today

If you have questions about mortgages or buying a house overseas and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0800 304 7880 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 charge a fee and there’s absolutely no obligation or marks on your credit rating.

Overseas Mortgage Information

Looking for specialist advice? Read through our articles about overseas mortgages and how to best prepare yourself to find the right mortgage for you.

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of 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 info 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.

Mortgages for Overseas Properties

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