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Mortgage for a holiday home abroad

Can I get a mortgage for a holiday home abroad? Get the right advice here!

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 30th May 2019* | Published: 30th May 2019

We get lots of enquiries from customers who are looking at buying a holiday home abroad and in all kinds of locations, from Florida to the Costa del Sol. These customers have many questions, such as, ‘can you get a mortgage for a holiday home abroad?’ and, ‘how do I go about this?’

Buying property abroad is rarely as easy as buying here in the UK, so to answer these and other commonly asked questions about mortgages for overseas holiday homes we have put together this guide, and you’ll find the following topics covered below...

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Can I get a mortgage for a holiday home abroad?

Yes! There are specialist mortgage providers who are happy to lend to customers who are purchasing a holiday property abroad, and if you meet their eligibility criteria, there’s a good chance you’ll successfully secure the capital you need.

That said, purchasing a property overseas is rarely as straightforward as buying domestically, so seeking advice from an expert broker, like the ones we work with, is recommended. Make an enquiry to speak to an expert about holiday homes abroad today.

How do I get a mortgage for a holiday home abroad?

As we’ve already touched on, getting a mortgage for a holiday home abroad is not always as simple as getting one on a property in the UK.

Your first port of call should be to speak to an expert broker as it should be for any mortgage, but more so for niche lending such as mortgages for buying abroad.

By speaking to an expert broker who has the experience of securing mortgages for holiday homes abroad you will be able to get the best advice for your circumstances and know whether it is best to use a UK based lender, a local lender in the country you are purchasing or looking at the possibility of remortgaging your current property.

The whole-of-market brokers we work with arrange mortgages for holiday home buyers every day and can introduce you to the lender who is the best fit for your needs and circumstances. Make an enquiry here to kick off the application process.

Can I get a UK mortgage for a holiday home abroad?

Yes, you can, many UK lenders offer overseas mortgage options, depending on the country you’re looking to buy in. Getting a UK mortgage for a holiday home abroad has its advantages, such as:

  • No document translation costs or problems.
  • Protection of the financial regulatory bodies in the UK.
  • Using a UK-based lender can be quicker due to them being able to assess your eligibility from domestic credit reference agencies electronically.

Countries some UK lenders are willing to offer holiday home mortgages in include France, Spain and Portugal, but your options are likely to be limited if the property you want to buy is located in a territory where there’s financial uncertainty, such as Ireland, Italy or Greece.

If you’re buying in one of these counties, a foreign lender might be the most viable option. Make an enquiry here and we’ll connect you to an advisor who can provide more information.

What other mortgages are available for a holiday home abroad?

You also have the option of using a mortgage lender overseas and this can be an international lender or a local provider in the country you are buying in.

There are a few advantages to getting an overseas mortgage which include:

  • Potentially better interest rates
  • More choice of mortgage products

One thing to consider is the volatility of foreign interest rate coupled with the uncertainty surrounding Brexit leading to fluctuations in sterling which could lead to increased repayments. If you’re concerned about any of these potential pitfalls, get in touch and the advisors we work with will carry out a risk assessment and help you safeguard yourself.

Can I remortgage to buy a holiday home abroad?

This can be a viable option for many who have either no mortgage currently on their property or large amounts of equity.

Remortgaging or even taking out a second mortgage for a holiday home abroad may seem like a good idea because of the potential to save money or time (sometimes even both), but there is a risk you are taking by doing this. If you were to raise the money from remortgaging or via a second mortgage on your own residential property, if anything was to go wrong it would be your home that would be at risk, not the place in the sun you bought to holiday in.

If you are considering remortgaging to purchase a holiday home abroad you should speak to an expert broker who has experience in this and will be able to give you the best advice for your circumstances.

Can I get an overseas holiday let mortgage?

Yes - many property professionals and aspiring landlords purchase overseas property as an investment, hoping to take advantage of the superior rental yields and higher capital growth on offer in certain markets.

Overseas holiday let mortgages are usually assessed based on the projected rental income, and while this can potentially be lucrative, keep in mind that it is also taxable. Some expenses can be deducted to reduce taxable profits, though this does not relate to personal use.

In addition to taxes, there are other expenses you should factor in, including…

  • Estate agent fees (if you’re using a local agent to find tenants for the property and manage it on your behalf)
  • Cleaning and maintenance costs
  • Void periods when the property is unoccupied

If you’re interested in purchasing a holiday let, you should start by making an enquiry with an expert overseas mortgage broker to make ensure you have access to all of the best deals that you qualify for. Make an enquiry and we'll be in touch soon.

Other things to consider when getting a mortgage on a holiday home abroad

Here are some other points to think about if you’re hoping to get a mortgage to buy a holiday home abroad...

Solicitors

Whether purchasing in the UK or abroad everyone needs professional assistance in the form of a solicitor. When purchasing a holiday home abroad with a mortgage good legal representation is crucial. Firstly, it is always best to seek an independent solicitor who is totally separate from any other party in the deal, including the seller, estate agent and/or the developer.

Secondly, if using a UK based firm make sure they are bilingual allowing them to converse with necessary people  in the country you are buying and most importantly make sure they have experience in international property transactions and conveyancing.

Taxes

There are multiple things you should consider and investigate prior to committing to your holiday home abroad purchase.

  • Check your own personal tax liability in the UK.
  • Check if there is any or additional property tax you are unaware of in the country you are purchasing, this could be an upfront cost when purchasing or an ongoing tax.
  • What is the counties IHT (inheritance tax) law?

Speak to an expert on holiday home mortgages abroad

If you have questions 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 pensions advisor 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.

Updated: 30th May 2019
OnlineMortgageAdvisor 2019 ©

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.

Mortgage for a holiday home abroad

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