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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: 9th September 2020*

We have helped hundreds of borrowers who have come to us with questions about Buy to Let mortgages for expats, whether that be for holiday homes or commercial properties. 

We also receive questions from expats currently living abroad, wanting to get a mortgage in the UK.

Lending can be more complicated and restricted for overseas expat borrowers who want to buy in the UK, but the good news is that there are options available.

If you would like to discuss your lending options or talk to an expat Buy to Let mortgage broker, click here

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Can I get a UK BTL mortgage in the UK as an expat abroad?

Expat Buy to Let applicants who want to buy a property in the UK but remain abroad must go through a different process to residential applicants who are based locally.

This is because establishing income, affordability and credit history can be more difficult if you have lived abroad for quite some time and therefore have less financial ties in the UK.

Many banks and other types of lender have tightened their criteria for expat Buy to Let mortgages and some have even stated that they are going to stop offering them at all, unless the applicant is a permanent UK resident – but the good news is that we work with expert brokers who can help you find the specialist lenders who consider this applications. 

How to improve your chances of getting a BTL expat mortgage as an overseas landlord

Below are some factors that could increase your chances of getting a Buy to Let mortgage for a British property, even if you have moved overseas.

Work with a mortgage broker

Navigating through the options available to you as an expat can be difficult, especially if you’ve never had a mortgage before. 

A mortgage broker takes away the burden of searching and comparing expat Buy to Let mortgage lenders. They can dedicate their time and efforts and find the lenders who are more likely to accept you. 

In fact, filtering out incompatible lenders saves wasted money in application fees as well as any unnecessary mortgage rejections on your credit file. 

Have evidence of a job 

  • If you’re employed, your lender may ask to see evidence of a contract of employment

Apply for a loan that will be paid by the time you reach 70

Some lenders cap the lengths of their mortgage agreements where later-life borrowers are concerned, as in some cases, older borrowers can have less income. 

This can affect a borrower’s ability to repay their mortgage, which can raise concerns for lenders.

Therefore, applying for a mortgage that would be paid off by the time you’re 70 or under can improve the likelihood of approval. 

Have a traceable credit record

A big problem for many expat buyers is that as they have been abroad, they have a lack of UK credit history, which makes them ineligible for a lot of BTL mortgages. 

Some applicants do have a traceable credit record, often through a form of financial association in the UK, such as a credit card. 

This can help lenders establish how financially responsible an applicant is. That being said, a credit report showing a record of bad credit can cause lenders to reject their mortgage application.

Can I get an expat BTL mortgage with bad credit?

A Buy to Let mortgage is deemed by most lenders as a riskier loan, as the mortgage payments are likely to be generated by any rental income that the property makes. 

A clean credit history demonstrates your ability to make payments on time and therefore any ‘bad credit’ can raise red flags to lenders and make them less likely to lend to you. 

This can reduce your choice of lenders and mortgage rates. 

However, specialist lenders may be open to considering applicants with a lack of credit history or ‘bad credit’, even in instances where the applicant has been rejected by another lender. 

Contact an experienced mortgage broker who can recommend the most suitable lenders for you.

Can I get an interest only BTL mortgage as an expat?

Lenders can be reluctant to lend to expats for a BTL mortgage, so if a loan is offered, it will most likely be on a repayment basis. 

Interest only mortgages pose too much of a risk to most lenders, especially if the borrower has affordability issues on their application. 

However, in exceptional circumstances where the borrower has clean credit and a larger deposit, it may be possible to find a Buy to Let mortgage for an expat on an interest only payment basis. 

Speak to an advisor here to discuss this. 

How much do I need to earn to get a expat BTL mortgage?

Many expats are also turned down for a BTL mortgage due to income-related issues and some lenders consider applicants who earn their income overseas to be higher risk. 

Lenders typically ask that the minimum income of an applicant for a BTL mortgage is £25,000 or more. 

There are also some lenders who require that any income is paid into a UK bank account although there are lenders who are happy to calculate affordability with income paid into a foreign bank account.

Many lenders also have a specified list of acceptable counties that the applicant can live in or currency in which their regular income is. What’s accepted varies between lenders so if you’ve been turned away by one lender there may be others who can accept you.

How much deposit do I need for a UK BTL mortgage as an expat?

The amount of deposit that a borrower may be asked for depends on a number of factors. 

For example, some lenders will only ask for a 25% deposit from borrowers who already own a property as it can be used to secure a charge against the second property they are buying.  

Often the more equity the applicant owns in the initial property, the larger the loan to value (LTV) rate and therefore the lower the deposit. 

However, borrowers who do not own a property that can be used as security for the loan, can be asked for higher deposits of 35% or more. 

Can my experience as a BTL landlord affect my deposit size?

Another factor that can affect the deposit size for an expat BTL mortgage is the experience of the applicant has of being a landlord.

Most lenders generally prefer experienced landlords as this can demonstrate their capability of managing a property and more importantly, finding tenants for income.

However, there are specialist providers that may consider first time expat buyers in the right circumstances. 

There are also a handful of lenders who may be willing to base their lending decision on the viability of the investment (i.e. whether the forecast rental income will cover the monthly payments).

Of course, such lenders can come with unfavourable terms or requirements for larger deposits, so speak with your mortgage broker who can assess each option carefully based on your situation. 

What are the acceptable deposit sources for an expat BTL mortgage?

  • 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 

Typically expat lenders would prefer you to have your own deposit available from your own sources. However, it may be possible to find a lender that will consider a gifted deposit from a relative, friend or third party.

Top tips for expats applying for a BTL mortgage 

  • Ensure your lawyer is fluent in both English and the local language, and that they understand property law.
  • If you’re appointing a UK legal firm, check that they’re registered with the Law Society in the UK and specialise in international transactions and property conveyancing.
  • Seek legal advice from a lawyer who is independent of everyone else involved in the deal including the seller, developer and the estate agent.
  • Consider expat Buy to Let insurance. For some lenders, this is mandatory as a lack of insurance poses a financial risk to the lender.
  • It can help the application process if the applicant’s references and payslips are written in English. If not you may have to pay for them to be professionally translated.
  • Only use online calculators for expat Buy to Let mortgages to give you a rough idea of how much you can borrow. These tools only provide quick estimates and leave out important details that lenders will want to know about when deciding whether or not to approve your mortgage. For a more accurate quote and for guidance on how to get a UK Buy to Let mortgage as an overseas resident, speak to a mortgage adviser.

How can a mortgage broker help you get an expat BTL mortgage?

As well as having access to a wide range of BTL lenders across the UK and overseas, a whole of market mortgage broker can help you in the following areas:

  • Checking contracts – Having a professional look through your documents and contracts can help to identify and issues or terms that may affect your mortgage application or ability to pay it in the future. Your broker can check for any increases in interest, charges for early repayments and then raise concerns before you sign anything.
  • Completing paperwork -The amount of paperwork that can come with a BTL mortgage application can be overwhelming. A broker can fill out the necessary documents on your behalf and then send them in time, to the correct authorities. 

How to find the best expat Buy to Let mortgage rates

To access the best rates and mortgage offers from Buy to Let mortgage lenders, you need to work with a professional who has experience in the BTL overseas market.

Drawing on the knowledge from previous mortgage agreements for expats, they can quickly identify the lowest rates and the lenders who offer the more favourable mortgage terms. 

The whole-of-market advisors we work with will find the lender best positioned to offer you a favourable expat buy to let mortgage, based on your needs and circumstances, and remove any legwork from the process by personally introducing you to them.

Speak to a BTL mortgage expert 

If you have questions about expat BTL mortgages and want to speak to a professional for the right advice, 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 charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 9th September 2020
OnlineMortgageAdvisor 2020 ©

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.

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