Expat Remortgages Explained

You might be looking to remortgage as an expat for several reasons. You may have moved abroad but have a UK property with a fixed-rate mortgage deal nearing its end. Or you might want to access some of the equity in your UK property.

In any event, you will need to apply for an expat remortgage if you currently live abroad but want to remortgage a UK property. In this article, we’ll discuss how mortgages for expats work and what you can do to give your application the best chance of being approved.

Can you refinance a UK property if you live and work abroad?

Yes. This is certainly possible, but you will need to apply for an expat remortgage. This shouldn’t be confused with an overseas mortgage used to buy or refinance overseas property. For more details on those, read our guide to overseas mortgages.

Remortgaging a UK property while living abroad is more complex than a standard remortgage. But it’s usually easier than getting a mortgage as an expat for the first time, as you will have a good payment record on your existing loan that will act as a lender reference.

Expat remortgages are available for both residential and buy-to-let properties.

Lending criteria for expat remortgages

Borrowing as an expat is considered a higher risk as there are additional factors for lenders to consider. Each lender has their own criteria, and they tend to be stricter than standard mortgages.

Factors likely to affect eligibility include:

Employment status

Some lenders will insist you are employed by an internationally recognised company, as confirming employment with a smaller company overseas can be tricky.

Not all lenders will consider expat remortgages for self-employed. Those that do will usually ask for three years of accounts certified by an accountant with an internationally recognised qualification.

Traceable credit history

Your existing mortgage payments, provided they are up to date, will be sufficient for some lenders. Others may want to see additional insights into how you manage your money, such as credit held against a UK address.

UK bank accounts

Most lenders prefer you to have a UK bank account. If you don’t still have one, get one as soon as possible and start to make regular deposits into it. This could strengthen your position when applying for an expat remortgage.

The currency you are paid in

Once again, lenders have different views on currencies. Some will only approve a loan if your salary is paid directly into a UK bank account. Others have a list of acceptable foreign currencies.

To calculate affordability for those paid in an accepted foreign currency, lenders usually convert their salary to sterling and deduct 20% before entering it into the calculator. This is to stress-test income against exchange rate fluctuations.

Amount of equity

The maximum loan-to-value (LTV) is usually capped somewhere between 60% – 80%, so you will typically need a minimum of 20% equity in your home.

If your equity is less than 20%, you may be able to use other savings or assets to get your application over the threshold.

Acceptable sources of funds for this include:

• Savings held in a UK or overseas bank account
• Stocks, shares and other capital assets
• Equity held in another property (some lenders will only accept other property owned in the UK)
• Inheritance
• Gifted deposit (not all lenders will accept this)
• Sale of property in the UK or abroad

How to get an expat remortgage

Your first step should be to find a specialist remortgage broker. This will save you a lot of time and boost your chances of getting approved at the best terms available.

Using our broker-matching service, you can speak to the right broker immediately by simply enquiring online.

They’ll be able to help with:

• Gathering all the necessary paperwork required for this type of remortgage
• Downloading and optimising your credit reports
• Finding the right lender and securing the best deal for you

Which lenders will consider an application?

High street banks that consider applications include HSBC and Nationwide.

Other possible lenders to approach include:

Are interest rates higher for expats?

Interest rates are typically higher than for a standard UK remortgage. This is because this type of borrowing is considered higher risk, and there is only a small selection of lenders.

However, the best rates for expat remortgages can still be competitive if the property has a considerable amount of equity and the LTV is low.

What happens to your mortgage if you move abroad?

Nothing. But when your fixed-term deal expires, you will need to remortgage or pay the lenders’ standard variable rate (SVR). Often, expats ask their mortgage company for ‘consent to let’. Tenants help pay the mortgage and meet building insurance obligations to keep the house inhabited.

Get matched with an expat remortgage specialist

Niche areas of lending require specialist guidance to avoid costly errors. For example, if you’re remortgaging as an expat for the first time, it’s essential you understand all your tax and legal obligations.

Our broker matching service will assess your circumstances and match you with an advisor with experience in successfully securing remortgages for people in your situation.

To get paired up with your ideal broker, call 0330 818 7026 or enquire online today.