UK Mortgages for Expats
Can an expat get a mortgage? Find out in our expat mortgage guide.
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Expat Mortgage Guide
We regularly receive enquiries from people looking for UK mortgages for expats, either here or overseas. As lenders see expats as a higher risk, many have been already been declined a mortgage or offered unfavourable rates. The good news is that the brokers we work with are experts when it comes to finding the right mortgage for expats (also known as expatriate mortgages). In this article we’ll try to answer the major questions expats have about obtaining an expatriate mortgage, including –
- What is an expat mortgage?
- Is it possible to get expat mortgages?
- Is buying property in the UK from overseas possible?
- What is the criteria for an expat mortgage?
- What kind of expat mortgages are available?
- Can I get an expat mortgage if I’m returning to the UK?
- Can I get a UK expat mortgage to buy overseas?
- As an expat looking for a mortgage how much can I borrow?
- What other factors affect mortgages for overseas buyers?
- Expat mortgages FAQ
- Speak to an expat mortgages expert
Expat mortgages definition: what are they?
To put it simply, an expat mortgage is a mortgage product aimed specifically at borrowers who are living overseas and want to buy a property in either their country of origin or the one they currently reside in. They are more difficult to obtain than standard mortgages for residents, as some lenders see these deals as higher risk.
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How does an expat mortgage work?
They work in exactly the same way as a ‘regular’ mortgage, except some of the lender’s checks and eligibility requirements might be more stringent due to the perceived added risk attached to expat lending.
Is it possible to get expat mortgages?
In a word, yes. Most of the enquiries we get are from British nationals who are living overseas and want to buy a property here in the UK, although some are looking for a mortgage in the country they are currently living in. Both have their own unique hurdles to overcome, but fortunately, the brokers we work with are experts when it comes to finding UK mortgages for overseas residents.
Is buying property in the UK from overseas possible?
Yes, it’s possible to obtain a UK mortgage for an overseas property (under the right circumstances) but there are a number of different requirements that are a little different to obtaining a standard mortgage as a resident. You’ll need –
- Proof of a job in the UK (preferably a contract)
- Proof of earnings from an internationally recognised accountant if self-employed
- Have a clean credit history (more on that later)
- A mortgage term that does not extend past your 70th birthday
Most lenders prefer expat buyers to hold a UK bank account and some make it a condition of the mortgage.
How to get a UK mortgage when living abroad
Due to the niche nature of these deals, you should start by seeking advice from a specialist whole-of-market broker to ensure you have access to all of the best lenders. Simply make an enquiry to take your first step towards an expat mortgage application. We will connect you to one of the experts we work with, so they can provide you with expert advice and match you up with the expat lender who is best positioned to offer favourable rates to a borrower with your exact profile.
What is the criteria for an expat mortgage?
Whether purchasing or remortgaging, the criteria is somewhat different for expats. Although for remortgaging for expats is a little easier as they have a credit history that can be traced. The key issues facing those looking for expat mortgages in the UK are –
- Credit history – If you have been overseas for a length of time, then your credit history may be hard to trace by UK lenders. The experienced brokers we work with know which specialist lenders may be willing to offer customers a mortgage despite having bad credit.
- Income – Lenders deem those who earn their income outside of the UK to be a higher risk and may turn down an applicant if proof of income is difficult.
- If you’re employed –
- Lenders prefer applicants who work for an internationally recognised company (although this is not essential)
- Payslips and other proof of earnings are usually required to be translated into English if necessary.
- Some lenders may require you income to be paid into a UK bank account.
- If you’re self-employed –
- Accountant must be internationally recognised
- The usual self-employed criteria may apply.
What kind of expat mortgages are available?
The most common type of mortgage we are asked about are residential mortgages for expats. This could be a place to live here for a returning expat, or a live abroad UK mortgage.
Can British expats get mortgages for a Buy to Let?
Yes. Many expats purchase a buy to let as either an investment or a place to live when they return to the UK. Find out more in our guide to Buy To Let Mortgages.
Can I get a mortgage for a holiday home as an expat?
This is but only a few lenders offer these types of mortgage. Both holiday homes and expat lending are each considered niche categories – so when they are combined, specialist advice is an absolute must to ensure you end up with a favourable deal. The good news is that the brokers we work with know exactly which lenders will consider expat holiday home mortgages and will connect you with the provider best positioned to cater for your needs and circumstances if you make an enquiry. Read more about holiday home mortgages.
Are there mortgages for expats who are returning to the UK?
Yes, although a specialist lender will likely be required. Returning expats face challenges when it comes to getting a mortgage in the UK, as most providers won’t lend to customers who had no fixed address in Britain during the last three years. Living abroad may also mean their credit history is difficult to trace. There are steps you can take to improve your chances of getting a mortgage upon your return to the UK, if you have the luxury of being able to forward plan. They include…
- Maintain a UK correspondence address: This could be your parents’ address or that of a family member or close friend.
- Save up additional deposit: Having additional deposit funds to put down can help offset the risk posed by your expat status. You can read more about expat mortgage deposit requirements in the next section of this article.
- Keep a UK credit file: One way you can do this is by using an international credit card from a UK provider or maintain a UK bank account from abroad.
- Have work lined up in the UK: Having worked lined up in the UK when you return will certainly help your chances of securing a mortgage, although may need to put some time in with your employer before making an application. Some lenders expect six months’ employment history, while others will accept three. If you’re returning to a previous job, your choice of lenders could be wider as this will give you a traceable employment history.
If you’re unable to boost your chances of securing a mortgage by doing the above, don’t panic.
There are specialist expat lenders out there who are more flexible when it comes to lending to the following…
- Newly returned expats
- Self-employed expats
- Retired expats who are returning to the UK
- Returning expats with bad credit (as long as the credit issue is over 6 years old)
In order to access these niche lenders, using a whole-of-market broker, like the ones we work with, is recommended. Make an enquiry to speak with one today.
How much deposit do I need as an expat returning to the UK?
The deposit you will need is usually 25% of the property’s value, but this can vary depending on the location and the property type. A select few lenders may require less under the right circumstances.
As far as lenders are concerned, the more deposit you have, the more likely they are to offer you a mortgage, and the better the rates.
Finding a UK expat mortgage with a 10% deposit, is possible, but you’ll need the right advice from one of the whole of market brokers we work with, who may be able to find you a specialist lender who would consider a 90% LTV mortgage for an expat.
Does it matter where the deposit comes from?
Yes. International anti-money laundering laws require lenders to be very careful about where funds are coming from. If your deposit is in savings or an investment overseas, then justifying or proving where your deposit came from can be difficult if you’re an expat living abroad, as many lenders only accept deposits saved or gifted from a UK source, which can be easily traced to a UK account. Fortunately many expats keep accounts open back in the UK, but those who don’t may well struggle with certain lenders.
Acceptable sources of deposit are:
- Savings in account (UK or overseas depending on country)
- Investments (Stocks / shares / capital held in the UK or abroad)
- Sale of property (UK or overseas, again depending on country)
- Equity in another property (This is simplest if the property you own is in the UK, but may be possible with an overseas international mortgage/secured loan lender. If the property is in the UK there are many lenders who will consider expat remortgages or secured borrowing, to secure a charge against a property you already own).
- Inheritance – this must actually have gone through probate. Lenders will not consider a will as proof of deposit as they can be changed or the person on the will may not pass on for many years.
- Gifted deposit. Typically expat lenders would prefer you to have your own deposit, but it may be possible for some to consider a deposit coming from a close relative. Although it may be possible, depending on the circumstances, for a friend or third party to gift deposit, but very few lenders will consider this.
Are there UK mortgages for buying overseas?
Yes, if you’re a British expat looking to purchase a property in the country you’re currently residing in, the following options may be available…
- Use a specialist international lender that offers UK mortgages
- Use a specialist UK mortgage provider that lends overseas
- Remortgage a UK property to buy overseas
- Alternately, some British expats may qualify for a mortgage from a local lender in their current country of residence
For more information see our guide to buying property overseas .
As an expat looking for a mortgage, how much can I borrow?
One of the most common questions we are asked is ‘what is the largest mortgage I can get?’ It all comes down to affordability. How much you earn versus your outgoings. Lenders will also factor in other criteria, such as how much deposit you have and your credit history. Every lender is different and tend to use their own affordability models based on net disposable income. Then they apply their own cap based on income multiples. So the amount that you can borrow is usually determined by multiplying your annual salary (or salaries if there is more than one of you applying). Most lenders will work on 4-4.5 times income, while some will allow mortgages of up to 5 times income and a few will let you borrow 6 times your income.
Here is an example of how different multiples can affect how much how much a mortgage provider is prepared to lend.
|Income||4x Income||5x Income||6x Income|
You can find out more about affordability or talk to one of the expert advisors we work with for the right advice.
If the property you are buying is intended to be let out, then the expected rental income will have an impact on how much you can borrow.
Loan to Value (LTV)
The other factor is loan to value. Most lenders work on a loan to value (LTV) ratio of 75%, while some will go to 85% and a few will offer as high as 90% LTV. All lenders are different and your credit history can have an affect on what LTV a lender is prepared to offer. Because of this, we recommend you talk to one of the advisors we work with. They are whole of market and experts at finding the best deal, even if you’ve had bad credit.
What other factors affect mortgages for overseas buyers?
It’s true that buying property overseas is usually more complicated than buying locally, so you’ll need to consider a number of risks and might need to work out how to get a mortgage for a property abroad Here are a few issues you’ll need to consider –
- Taxation – make sure you account for all the tax you’ll be liable to pay, both in the UK and in the country where you have the property.
- Ensure the paperwork is correct – make sure that you have all the necessary permissions, licences and planning consents before you sign any form of contract or agreement. Consult a solicitor who knows the local market and speaks the language.
- Exchange rate changes – even a small change to the exchange rate could drastically affect the value of your purchase. This could make a property – or your mortgage repayments, unaffordable overnight.
- Language difference – Given the complexity of these types of transactions there’s the increased risk of small but significant details being lost in translation.
Expat mortgages FAQ
Here, you will find the answers to some of the questions we hear most frequently about expat mortgages…
Can I get a UK expat mortgage with 90% LTV?
This is possible, but your choice of approachable lenders might be slim. Most expat lenders offer a loan to value (LTV) ratio of 75%, while some will go to 85% and a few will off as high as 90% LTV. To get a higher LTV mortgage, it will help your cause if you meet all (or at least most) of the lender’s other eligibility requirements.
Are there offset mortgages for expats available?
There are some lenders who offer offset mortgages and these can be an attractive alternative to an interest free or standard repayment mortgage. An offset mortgage allows a borrower to use the savings they have to reduce the amount of interest they pay on their mortgage. For example, if you have a £200,000 mortgage and £20,000 in savings you will only pay interest on £180,000. You’ll need to keep your savings in an account with the same bank or lender that provides your mortgage. Talk to one of the expert brokers we work with for the right advice on which mortgage will work the best for your circumstances.
What happens if the value of the currency goes up or down?
If you’ve taken out a mortgage and you’re making repayments in a foreign currency, the lender must tell you if the exchange rate fluctuates by more than 20%. These rate fluctuations could affect your ability to meet your future mortgage commitments. To protect borrowers, lenders must offer you the option to repay the mortgage in another currency.
Can an expat get a mortgage with bad credit?
Bad credit can have a detrimental affect on your application. It all depends on how long ago the incident was, how severe it was and what the final outcome was. You can find out more about how they can help people getting a mortgage with bad credit. More deposit than usual may be required.
Can an expat get a mortgage on interest only?
Yes, there are a few specialist lenders who will offer interest only mortgages to expats and the expert advisors we work with know who they are. An interest only mortgage requires a viable ‘repayment strategy’. This is the plan by which you’ll be able to pay the capital at the end of the loan period. It should be noted that a repayment or exit strategy is only required for a residential home, not a buy to let, as it is usually assumed by the lender that the sale of the rental property will cover repayment at the end of the loan period. Find out more about interest only mortgages .
Are there large expat mortgages available?
Yes, but you will need specialist advice to find them. Mortgage loans that are especially large are usually provided by niche or private lenders, some of whom cater for expats. There are also small expat mortgages available, and they’re often easier to come by. Make an enquiry to speak with a whole-of-market broker about this today!
How long does it take to get an expat mortgage?
This can vary depending on the complexity of the application, but around 4-6 weeks is standard for an expat mortgage deal.
Can you apply for expat mortgages online?
You can kick-start the application process online by making an enquiry . If an online application is your preference, we can connect you to a broker who will carry out the bulk of the process online, and there are also lenders who are happy to work through this channel where appropriate.
Talk to an expert on expat mortgages today
We’ve helped over 120,000 find mortgages. We think the brokers we work with are the best in the business, and so do our customers as we are consistently rated 5 stars on Feefo. If you have questions about getting an expat mortgage and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry.
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.
Expat Mortgage Information
Looking for specialist advice? Read through our articles about different types of expat situations, and how best to prepare yourself to find the right mortgage for you.