UK Expat Mortgages
Everything you need to know about getting a mortgage as an expat and how to secure the best rate
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If you’re a UK expatriate (expat) and looking to purchase a property at home, it’s crucial that you understand how mortgages for expats work. There are some subtle but significant differences compared to a regular mortgage.
This guide covers all the essential details you need to know about getting a mortgage as an expat. We’ll explain how the process works, the deposit expectations, examples of available lenders, and where to get expert support to find the best rates.
Keep reading for a complete explanation of UK expat mortgages, or click on a link below to jump straight to a section…
What is an expat mortgage?
It’s a type of mortgage product designed specifically for expats looking to buy property at home in the UK. Nowadays, it’s much more common for people to work overseas as international expats. These mortgages can make home ownership a realistic option if you’re based abroad or happen to be an expat returning to the UK.
Alternatively, if you’re an expat but looking to buy a property in the country where you currently reside, or anywhere internationally, then you’ll need an overseas mortgage – which would work slightly differently as you’d need to do your research on all of the local rules and requirements before you apply.
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Eligibility and deposits
For the most part, expat mortgages work similarly to standard mortgages. The main difference is that there can be stricter lending criteria and more stringent deposit demands because some lenders view expats as a higher risk than other borrowers.
Your deposit can be a key factor in the process. Some lenders will request that you put down a larger deposit if you’re an expat. You may also face tighter rules around where your deposit comes from. The idea is to offset the additional perceived risk of lending to international expats and British expats returning to the UK.
A bigger deposit will reduce your loan-to-value (LTV) ratio, and potentially reduce how much you’re borrowing. Most lenders will want at least a 25% deposit, and due to international anti-money laundering laws, you’ll likely need to have proof of where your deposit came from.
Here are a few examples of widely acceptable sources of deposit:
- Savings accounts – ideally from a UK bank, but some other countries and currencies can be used (depending on your lender).
- Investments – equities, bonds, and sometimes even commodities like gold.
- Sale of a property – or using equity from a second property by remortgaging (from the UK or overseas).
- Inheritance – as long as it’s gone through probate.
- Gifts – some lenders will consider a gifted deposit from a close relative (and a small few will allow gifts from friends or a third party), but many don’t permit gifts.
The other main areas to be aware of when trying to qualify for an expat mortgage includes the following:
- Loan-to-value (LTV): most lenders who offer expat mortgages will have LTV caps in place, limiting the amount you can borrow without a sizeable deposit. These LTV thresholds typically range from 60% to 80%. But, a few lenders are more flexible and have no limits in place for expats looking to get a mortgage.
- Country: this can heavily impact the strength of your application. Financial rules and regulations can operate in various ways, and UK banks and lenders will want to see that your application is coming from a place of financial stability. Some lenders have lists of acceptable/unacceptable countries of residence. Yet there are also lenders who will consider your application no matter where you live.
- Currency: certain currencies are viewed more favourably than others due to their stability, wider acceptance across borders, and whether a lender is happy to accept them. In some cases, lenders will accept currencies other than sterling, but it might be converted with a percentage ‘haircut’ (reduction). Foreign exchange rate fluctuations are also worth taking note of because these can impact your home-buying finances
- Employment: some lenders will require that you are still in full-time employment abroad when making your mortgage application, and sometimes you need to be paid into a UK bank account. Most of the same eligibility criteria will still apply if you’re self-employed, but your accountant will usually need to be internationally recognised.
- Bank account: it will often be useful (if not crucial) that you have a UK bank account up and running. So, if you are living abroad, it’s well worth keeping a bank account open back home because it will likely make your mortgage application process much smoother.
- Credit: like with any mortgage, your credit history will be important. This is why it can be worth keeping UK ties (like a phone, bank account, postage address, or being on the electoral register). So that credit agencies will have some recent records. Some lenders will want to see at least 6 months of UK credit history before providing a mortgage to ensure a valid credit search and electronic ID check can be carried out.
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How to get an expat mortgage
Securing a mortgage as an expat can be more complicated than if you were a resident in the UK as there are a few more factors to consider. As a result, the smart first step is to speak with an expat mortgage broker who has experience assisting people to navigate the mortgage process under similar circumstances.
If you make an enquiry with us our free broker-matching service will be able to match you with an advisor who specialises in this area.
Your mortgage broker will then be able to help by offering the following services:
- Assess your finances: This includes taking foreign earnings into account as well as any nuances such as being self-employed or having bad credit. A broker can advise on your eligibility for a mortgage in the UK or elsewhere and the amount you can borrow.
- Explain the different mortgages available to you: It could be that you plan to buy a property in the UK to rent out or use it as a holiday home when you visit. Maybe you plan to buy abroad but will rent that out too or live in it full time. Your circumstances will determine the kind of mortgage you need and the criteria for each will differ. An expat mortgage specialist can help you navigate through all these different scenarios to reach the right outcome.
- Find the right mortgage lenders: The pool from which to choose will likely be significantly smaller with a few less familiar names but a broker will know which lenders currently offer international mortgages and where to apply for the most competitive rates currently.
- Help compile your application: To verify overseas earnings and your identity, extensive forms, checks and evidence usually need to be completed and submitted. A broker can help you in compiling it all and advise you on how to pass the stricter affordability tests.
- Local residency and tax implications: Your mortgage broker will be able to offer guidance on what you should do regarding your current residency and how buying a property may need to be recorded in your local jurisdiction for any potential tax liabilities etc.
- Advise on the course of action when/if you decide to return to the UK: A broker will be able to help you remortgage onto a different arrangement should your circumstances change.
How much will an expat mortgage broker cost?
Typically, for this type of mortgage, brokers will either charge a flat fee of between £500-£1,000 or between 0.5%-1% of the amount borrowed, usually payable upon completion. However, this all depends on the complexity of the application and can vary.
In certain cases, a broker may ask for part of their fee at different stages during the process with a final payment once the loan is in place. Some brokers may not charge a fee at all and simply take a procuration fee (usually up to 0.5%) directly from the mortgage lender upon completion.
Expat mortgage calculator
If you want to know how much you can borrow with an expat mortgage, the answer will depend on the lender you speak to, and the strength of your application. Most lenders will use income multiples, just like with a regular mortgage. Many will use an average multiple of 4-4.5x your income, but certain lenders will have tighter rules and a lower multiple to offset their risk.
Also, only some lenders will use income multiples, others will have their own unique methods for calculating affordability. If you want a better idea of how much you can borrow, try out our expat mortgage calculator below. Remember that the surest way to get the most accurate results is to discuss your situation and finances with a specialist mortgage broker.
Mortgage Affordability Calculator
Our affordability calculator can tell you how much you can potentially borrow from a mortgage lender. Simply enter your total household income below and our calculator will do the rest.
You could borrow up to
Most lenders would consider letting you borrow
This is based on 4.5 times your household income, the standard calculation used by the majority of mortgage providers. To borrow more than this, you will need to use a mortgage broker to access specialist lenders.
Some lenders would consider letting you borrow
This is based on 5 times your household income, a salary multiple you might struggle to qualify for without the help of a broker. This income multiple is not widely available to customers who are applying directly with a lender.
A minority of lenders would consider letting you borrow
This is based on 6 times your household income, a salary multiple you will struggle to get without a broker. Six-times salary mortgages are usually only available under very specific circumstances.
Get Started with an expert broker to find out exactly how much you could borrow.
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UK banks and lenders offering mortgages
There aren’t many high street lenders and banks open to the idea of an expat mortgage. Here are a few examples of major UK lenders that do offer mortgages for expats:
- HSBC - you may be subject to higher rates with an expat mortgage, and you need to hold a ‘HSBC Expat Bank Account’ using either sterling, US dollars, or euros to qualify for its international mortgages and lending products. To join HSBC Expat, you need to keep at least £50,000 with the bank or have a salary of at least £100,000.
- Nationwide Building Society - offers expat mortgages, but with a maximum LTV of 75% - meaning a minimum 25% deposit that must come from you (savings, equity etc.) and not be a gift. You also need to have at least 3 years of UK address history.
- Suffolk Building Society - open to residential (and regulated BTL) applications as long as your income comes from a list of 11 different currencies, and there will be an 80% maximum LTV. Also, you’re unable to mix currencies. If you’re not paid in sterling, a 20% haircut will be taken off before going into the affordability calculator.
Many popular lenders like Santander, Barclays, Natwest, and Halifax will not even entertain the idea of expat mortgages, regardless of your strength as an applicant. If you want to see the full range of lending options, the best move is to speak with a specialist broker who can access lenders and mortgages not advertised publicly.
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Examples of current interest rates
With a fast-changing interest rate environment, the range of applicable rates can vary wildly from month to month. The rates available for expat mortgages tend to be higher than those offered to applicants who are based in the UK and have never lived abroad.
Take a look at our rates table below to get an idea of the current deals available for expat mortgage applicants.
Looking for more rates and deals?
We can match you with a mortgage broker who can provide you with up-to-date bespoke rates and deals from across the entire market.
Last updated September 2023
Please note that the above rates were accurate at the time of writing, but are always subject to change. Speaking to a mortgage broker is the best way to find the most up-to-date deals.
If you want to see the latest options available, the best course of action is to discuss your situation with an expert broker. They’ll be able to give you an accurate representation of the rates you’re likely to get with your home loan. Your broker can help find you a competitive rate and get a tailored lending arrangement that suits your needs.
UK expat Buy-To-Let mortgages
It can be possible with a small number of lenders to get a buy-to-let (BTL) mortgage if you’re an expat. Along with the eligibility criteria already discussed, here are some additional points to keep in mind about BTL expat mortgages in the UK:
- There may be stricter LTV caps and higher deposit requirements (these can fluctuate based on elements like the property location).
- Certain lenders will have country-specific rules. For example, BTL mortgages are only available to applicants living in particular countries (sometimes only ones highly ranked in the Corruption Perception Index).
Speak to an expat mortgage specialist
Navigating this area of mortgages without expert advice can be extremely difficult. There are loads of moving parts to be aware of, and as an expat, there are many complex obstacles to overcome when trying to organise your finances and find a mortgage.
We offer a free, broker-matching service. This means we’ll quickly assess your needs and then introduce you to a specialist mortgage broker with plenty of past success securing expat mortgages.
Just call 0808 189 2301 or make an enquiry. We’ll arrange a free, no obligation chat between you and your ideal expat mortgage broker today.
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