Expat Mortgage

Welcome to UK Property Finance’s guide to mortgages for expats, we’re happy to offer a wealth of information to expats who are looking to secure a mortgage in the UK. Whether you’re looking to purchase a buy-to-let property when working and living abroad or require a home mortgage as an expat relocating back to the UK.

What is a UK expat mortgage?

A mortgage aimed at UK nationals living abroad and looking to purchase property in the UK is known as a UK expat mortgage. If you currently reside overseas as a UK national, you fall under the expat category. However, accessing lenders who specialise in expat mortgages can be difficult without assistance.

Our expat mortgage broker team specialise in this area and can access a wide range of mortgage products tailored specifically for UK expats, which may not be available on the high street. Our team work with you to find the best mortgage product that accommodates your foreign income, complex income structure and overseas employment status.

How do I Apply for a UK expat mortgage?

Applying for an expat mortgage can be a complicated process; often it can be best to use a mortgage broker, such as UK Property Finance.

Many high street lenders are unwilling to take on the additional administration involved in processing an expat mortgage application. They may find it harder to validate your credit history, employment status and financial standing. High street lenders may also reject your application if your earnings come from a foreign currency.

Expat mortgage brokers will have access to a large amount of UK lenders who are familiar with expat’s and are more than happy to work with you. These lenders will be able to provide advice on whether you’ll be accepted for an expat mortgage, the best rates, fees and the length of the process.

A Mortgage broker such as us here at UK Property Finance will always be more than happy to help you gather the necessary supporting documents that you need to satisfy lending criteria.

How much can I borrow?

Similar to any mortgage, the amount you can borrow for an expat mortgage depends on your affordability. Your income and expenses will be assessed by the expat lender. Additionally, your credit rating and the deposit you can provide will also impact your borrowing capacity.

The majority of UK lenders typically offer between 4.5 to 5.0 times your yearly income, based on your net income and how their affordability is calculated. Other factors such as past employment, outstanding unsecured debt and how many dependents you have may also be considered.

For most expatriate clients, a high LTV (Loan to Value) expat mortgage typically maxes out at 75% of the property’s purchase price.  All lenders will vary, so by speaking to an experienced advisor you can source a lender that offers the most borrowing if that is what you require.

A knowledgeable mortgage advisor specialised in expat mortgages has an in-depth understanding of lender criteria and can provide you with an accurate estimation of your borrowing potential after reviewing your unique situation.

How much deposit is required for an expat applying for a UK mortgage?

Most lenders will want a minimum 25% deposit for both residential and buy-to-let mortgages in the UK. The larger your deposit, the more competitive the mortgage interest rates and terms are likely to be.

Do I need a good UK credit rating for an expat mortgage application?

If you’ve been residing overseas and haven’t maintained a credit profile in the UK, you may still be eligible for borrowing. Some specialist lenders have alternative means of verifying your borrowing status.

Having a strong credit history in the UK can certainly simplify the mortgage application process and potentially lead to lower rates and better terms. However, meeting certain application criteria may suffice:

  • Providing three months of bank statements that demonstrate healthy finances, without any overdraft usage indicating that you may be spending more than you are earning.
  • Providing recent utility bills and phone bills paid in a timely fashion. Bills registered to your foreign address can be used.
  • Submitting credit card loan statements, even if obtained outside the UK, showing payments made on time.
  • Disclosing any personal loans or car finance and providing three months of statements to demonstrate on-time repayments.

What are the requirements for an Expat UK Mortgage Application?

The application criteria for an Expat UK Mortgage are dependent on your country of residence. Unfortunately, some countries considered ‘high-risk’ are not accepted by lenders. However, if you are in Singapore, Dubai or the USA your chances of getting a mortgage are significantly higher. Lenders are generally equipped to process applications from these countries.

On the other hand, Australia as well as some European and African countries, can be more challenging and lenders may have stricter criteria for applicants. To apply for an Expat UK Mortgage, you will typically need to meet the following requirements:

  • Three months’ worth of bank account statements for all accounts
  • Evidence of the source of the deposit for the past three months, including details of the account the deposit was transferred from
  • Proof of address
  • Ideally, a traceable UK credit rating with a good credit score.
  • Higher income than what is required in the UK, as lenders must factor in currency fluctuations. You may need to earn 10 to 20% more to pass the affordability criteria, depending on the country and currency.

What documents do I require for an Expat UK Mortgage?

The complexity of your application determines the number of documents required to verify your deposit, income, nationality and identity. The following are the documents required for almost all expatriate mortgage applications:

Proof of Income

  • Your personal CV (especially if you work in an industry with high turnover)
  • Copies of recent wage slips
  • Proof of commission earnings or bonuses
  • For self-employed applicants, business accounts and tax returns for two or more years if you are self-employed. These may need certification from an internationally recognized accounting firm.

Proof of Affordability

  • Details of all income and expenditure overseas
  • Info on properties you currently own, including details on mortgage and rental
  • Credit card statements and balances
  • Information regarding any other financial commitments you have, such as loan and car payments.

Mortgages for Expats returning to the UK

For expats returning to the UK and looking for a home mortgage, it can be challenging to obtain finance from a standard high street mortgage lender. This difficulty becomes more pronounced if your earnings are still paid in a foreign currency while applying or if you’re between jobs during your move.

Some lenders specialise in working with expats looking to relocate back to the UK. For instance, if you have a job offer for when you return but haven’t started yet, we can secure you a mortgage deal based on your projected income by obtaining the relevant documents and connecting you with the most appropriate lender.

Likewise, if you have overseas income or complex earning sources, an expat mortgage expert will source lenders with specialist underwriters suitable for your application, even if your current bank or mortgage provider has turned you down.

A reputable mortgage advisor will have the experience and connections to secure you the funding that is affordable, regardless of whether it’s a specific currency or an unusual industry that’s causing roadblocks.

Remortgages for UK Expats

Obtaining a remortgage as a UK expat can be a challenging and time-consuming process, but the benefits of securing a good rate on a new mortgage will be worth the effort and cost.

Our team helps clients daily with their remortgage applications, which are usually driven by the following:

  • Transferring a UK standard home mortgage to a buy-to-let mortgage
  • Remortgaging at a lower LTV (loan-to-value) to obtain the best interest rates and therefore reduced repayments
  • Remortgaging following a wage increase: A better LTI (loan-to-income) ratio can help you to raise more funds
  • Refinancing to free up capital, for instance, to invest in a new UK buy-to-let property

Buy to Let Mortgages for UK Expats

A great number of the clients that we have who are expats want to purchase a UK property on a buy-to-let mortgage. Not only do they want the property to sever as an investment, but also to eventually become a base when they return home.

As someone who has chosen to live abroad, it’s fascinating how you can find yourself more acquainted with the housing market back in the UK, despite your time spent away. It’s understandable, though, considering the enticing prospects of rental income and property value appreciation that make investing in buy-to-let properties across the UK such an appealing opportunity.

However, typically most mortgage lenders will not consider non-UK residents for buy-to-let applications.

If you are able to arrange a deposit in the region of 25%, it could be possible to source a BTL mortgage via a specialist lending platform, as most banks consider these mortgages for expats to be too costly. It is worthy to note that in case lenders may however be unwilling to offer interest-only options for expats, though if you have a credit score of exceptional level, this could be a possibility still.

A specialised mortgage broker can come to your aid and assist you in discovering a suitable deal that caters to your specific requirements.

Mortgages for UK expats earning foreign income

Obtaining a mortgage with foreign earnings can be extremely difficult. Even popular currencies such as US dollars or Euros can be seen as highly risky for most high street lenders. Foreign currency income streams pose several challenges for banks:

  • Fluctuations in exchange rates could impact your ability to meet your mortgage repayment obligations, which is beyond yours and your lender’s control
  • Your lender may have difficulty verifying your income stream and identifying your employer
  • Income sourced from abroad presents a greater risk of money laundering
  • If you have lived overseas for an extended period, you may have a poor or untraceable credit history

These factors present an increased risk to your bank and make the administrative process more costly. However. Specialist lenders and some high street lenders can accept foreign income for a mortgage under the right conditions. You need to properly present your application, possess the necessary documentation and ideally employ the services of a mortgage broker who will help you in all aspects of your application.

Application for a joint UK mortgage with a non-UK national spouse or partner

When it comes to obtaining a mortgage in the UK, things can get a bit tricky if your partner is not a UK citizen. Mainstream lenders may pose challenges and your application could even face rejection due to the complexities involved. But fear not!

A specialist lender tends to offer more bespoke products than traditional lending avenues and can be more sensitive to your needs, meaning the chances of owning your dream home can still be a viable reality.

Firstly we would need to confirm that you have been a resident of the EU for a minimum 3 years, are in full time employment and hold a UK full bank account.

Your situation is a complex case and one we understand the pitfalls and obstacles of, and as such, we know how best to manoeuvre these.

For a foreign national living outside the United Kingdom, it is recommended that you seek advice and guidance on property matters from a specialist broker like us. Our knowledge of the market and having access to hundreds of products, means we can most definitely help or at least advise you on the route you should be considering.

 Making informed decisions is crucial, and they can provide the valuable assistance you need throughout the process.

Remember, the journey to homeownership may present its fair share of challenges, but with the right support by your side, you can navigate through them and ultimately achieve your goals.

UK Mortgage for Seafarer

Obtaining a mortgage as ship crew member or a seafarer is typically a complex and daunting task.

Determining whether you’re classified as a UK resident, an expat, or in between can be more overwhelming than seasickness.

Furthermore, expat mortgages and standard UK resident mortgages have significant differences, with expat cases generally more costly in terms of setup fees and interest rates.

Therefore, it’s essential to get your residency status right and taking the necessary steps to be classified as a UK resident can make all the difference.

Countries Eligible for UK Expat Mortgages

The ease of your mortgage application depends on the country you reside in.

Certain UK lenders handle a significant number of expat mortgages from countries such as the United States and UAE (United Arab Emirates), making them well-equipped to handle such applications.

However, other countries are not as frequently seen by lenders, meaning they may not have the necessary infrastructure in place to handle applications.

This lack of specialists can make them less familiar with tax laws, employment regulations and cultural nuances of your country of residence, resulting in greater administrative burden and financial risk when lending you money.