UK Expat Mortgages
UK Expat mortgages are specialist property loans for individuals living abroad who wish to purchase or re-mortgage property in their home country. Our advice addresses the unique challenges faced by expatriates, such as differing eligibility criteria, higher deposit requirements, and the impact of currency exchange rates. In this UK Expat mortgage guide, we will cover essential topics, including types of properties, specialist lenders, mortgage products, interest rates, documentation requirements, and strategies to mitigate currency exchange risks. As a specialist broker we have access to lenders that have more flexibility in criteria with expats reducing the need for large income and approvals in higher risk countries.
UK Expat Mortgages
UK Expat mortgages are specialist property loans for individuals living abroad who wish to purchase or re-mortgage property in their home country. Our advice addresses the unique challenges faced by expatriates, such as differing eligibility criteria, higher deposit requirements, and the impact of currency exchange rates. In this UK Expat mortgage guide, we will cover essential topics, including types of properties, specialist lenders, mortgage products, interest rates, documentation requirements, and strategies to mitigate currency exchange risks. As a specialist broker we have access to lenders that have more flexibility in criteria with expats reducing the need for large income and approvals in higher risk countries.
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PROCESS BREAKDOWN
Information gathering and advice
The first process in your Expat mortgage application will be gathering or updating information in relation to the property, tenants, or yourself. Once this has been established your expert Expat mortgage broker will make a product recommendation.
Credit approval
Once you are satisfied with the product recommended and have confirmed to proceed, this will usually be submitted the same day to give you a decision, until this point there is still nothing to pay! As long as the Agreement in Principle (AIP) is approved, we can move to application stage where fees become payable.
Application, valuation & underwrite
Once the application is submitted, your valuation will paid and depending on the lender you valuation will be instructed immediately, or once your initial underwriting has been completed. Once the valuation is returned, if acceptable, the lender would then look to make a formal offer. You can then move to legal stage.
Offer and completion
Once you have had your Expat mortgage offer, you will require legal advice, your solicitor can draw down the loan once the legal requirements are satisfied. Your broker at Mortgage Lane will always be checking in on the application post offer, so we are chasing your completion for you too!
Expat criteria and beyond
Expats residing in another country in the UK usually face extra criteria requirements to obtain eligibility for some of the most competitive products. At Mortgage Lane, we are experienced to place you with the most suitable cost-effective lender wherever you reside. Understanding Expat mortgage criteria will help expats navigate the complexities of securing a mortgage while living overseas.
We assist Expatriates of the UK with mortgages for residential, buy to let and commercial property with or without property experience. Our expat mortgage advice will take borrowers to the most competitive mortgage options, in this guide we will showcase some of the specialist scenarios we can assist with, including how we can assist with expat mortgages in various residency locations.
Expat criteria and beyond
We assist Expatriates of the UK with mortgages for residential, buy to let and commercial property with or without property experience. Our expat mortgage advice will take borrowers to the most competitive mortgage options, in this guide we will showcase some of the specialist scenarios we can assist with, including how we can assist with expat mortgages in various residency locations. At Mortgage Lane, we are experienced to place you with the most suitable cost-effective lender wherever you reside. Understanding Expat mortgage criteria will help expats navigate the complexities of securing a mortgage while living overseas.Personal Expat criteria we can assist with
- Expat mortgages for first time buyers
- Expat mortgages with low income
- Expat mortgages with bad credit
UK Expat mortgage products
Typical mortgages products for a UK expat mortgage would be:- Open market value (OMV) lending
- 75% Loan to Value (LTV)
- Product transfers available
- Further advances available
- Rates starting at 5.29% for 75%LTV
Buy to Let Mortgages for Expats
We assist both business owners and investors with Expat Mortgage advice. Below we explain all the types of letting variations you might come across as well as information on different ownership types and how this can impact your mortgage options.
For Expats this is the most common letting type we see, as borrowers moving away then rent out their previous residence to become an Expatriate.
A single let is a property rented to one household. Mortgage lenders do not usually require any experience for this letting type, so it can be suitable for first time investors or landlords looking to expand their portfolio.
Lenders will access these properties against the valuers estimation of what the Assured Shorthold Tenancy (AST) will produce in rental income and not what you’re achieving.
If you are looking to emigrate to another country, we may be able to secure you an Expat buy to let mortgage for a single unit property before you go!
At Mortgage Lane we are used to complex cases where the property might be non-standard construction. We have successfully obtained Expat mortgages on the following residential buy to let property types:
- Cornish construction
- BISF Steel construction
- Precast reinforced concrete (PRC) construction
- Timber builds
- Timber frame
- Flat roof
- Deck access
- Single skin build
- Woolaway bungalows
- Colt bungalows
To obtain market leading UK expat mortgage products, it key to have some form of property experience before seeking an Expat mortgage for a HMO property, otherwise interest rates could be higher.
Expats looking for mortgages on large HMO properties usually will require a lender using a local commercial to commission an investment valuation report. This will provide the most accurate and appropriate valuation for this asset type. For experienced applicants there are many options for lending on these property types for a range of loan to values between 60-75% Loan to Value (LTV).
HMO mortgage lenders will want to see planning has been granted on a House of Multiple Occupancy (HMO) with 7 or more rooms will require planning or a certificate of lawful use in order to be a compliant dwelling. Lenders will want to see this, so for purchases it is best to get this in advance. As well as planning you will require HMO licensing requirement. This licence is essential when securing a mortgage for an HMO property.
For UK Expats looking for the best mortgage rates, it is key to have some form of property experience before seeking an Expat mortgage for a social housing property let to a Housing Association (HA) provider, otherwise you may be looking at higher interest rates.
Our expertise encompasses properties leased to a broad spectrum of social housing providers, many of whom handle complex care arrangements. We are adept at assisting clients in obtaining mortgages for properties that serve a vital role in both short-term and long-term social housing.
The varied landscape of social housing mortgages requires detailed knowledge of each property’s lease agreement. It is essential for our clients to provide Mortgage Lane with comprehensive lease details for the property they are looking to purchase or re-mortgage. This enables us to accurately match you with a lender that is open to the lease’s specific conditions, including the social housing provider, lease duration, and tenant demographics.
Types of social housing tenants
- Individuals in need of assisted care
- Housing for Homelessness
- Domestic abuse victims
- Care leavers
- Ex-offenders
Grade 1 and Grade 2 listed buildings for buy to let use require specialist mortgage options, as opposed to standard mortgages. Mortgage Lane can assist Expats looking to buy or re-mortgage a heritage classified property, we are connected with lenders that have products designed to lend against these asset types. These properties tend to be large in value and size, therefore we often see investment heritage properties them designed as flats or Multi Unit Freehold Blocks (MUFB). Being large in value this can make achieving higher loan to values harder, yet even if that is the case we may also apply “top slicing” which adds in personal income to make up for shortfalls calculated when stress testing.
Specialist Expat Mortgage Services
Being an Expat, you will not always qualify for standard mortgage products, having a mortgage broker will help direct you to the cheapest lenders available to you. Not all of these lenders deal with consumers, so working with a broker can often expand your lending options. We can assist UK expats with the following scenarios:- Alternatives to Bank of Ireland Expat mortgages
- Mortgages for Expats returning to the UK
- Expat HMO mortgages no experience
- Bank of China expat mortgage UK
- 90% LTV expat mortgage options
- Expat Commercial mortgages
- Expat Buy to Let mortgages
- Barclays Expat mortgages
- Expat mortgage HMO
UK Expat mortgage residency restrictions
We are able to assist UK expats with buy to let mortgages with borrowers residence in many areas around the world, below are some of the scenarios we are able to assist with.- Mortgages for UK Expats in Australia
- Mortgages for UK Expats in Dubai
- Mortgages for UK Expats in Hong Kong
- Mortgages for UK Expats in Singapore
- Mortgages for UK Expats in China
- Mortgages for UK Expats in Europe
QUESTIONS ABOUT EXPAT MORTGAGES
Expat mortgage lenders on buy to let property will use the rental income of the security property, which is the property you are buying or remortgaging.
If you are buying in your own name, you may be stressed harsher than an applicant with a basic rate tax bracket. As an example a basic rate tax payer might be stressed at 125% and a higher rate tax payer at 145%. For a 5 year fixed, the lender may stress against the payrate of that product, such as 5.89% for example. In this case the calculation would go as follows for a basic rate tax payer, receiving rent of £600pcm from the property. 600 * 12 / 1.25 / 0.0589 = £97,792 (maximum loan)
It is interesting to know that Limited companies are stressed with a rental coverage of 125% mostly, unless it is a HMO. This means that if you are a higher rate tax payer, struggling with stress testing and achieving hoped loan sizes, you may be able to borrow more on a limited company mortgage.
Yes, a UK Expat living in Singapore can obtain a buy-to-let mortgage for property in the UK, but there are specific considerations and requirements they need to be aware of.
Higher Deposit Requirements
UK Expats residing in Singapore often need to provide a higher deposit compared to UK residents. This can typically range from 25% to 40% of the property’s value, although it varies between lenders.
Income and Affordability Checks
Mortgage Lenders will assess the Expat’s income and financial stability. This includes their income in Singapore (which may need to be converted into GBP for assessment) and the projected rental income from the property.
Credit History
Having a UK credit history is advantageous, but some lenders may also accept international credit histories or require additional financial references.
Interest Rates and Fees
Expats might face higher interest rates and additional fees compared to domestic borrowers. It’s important to compare different mortgage offers. Lenders might consider the impact of exchange rate fluctuations on the applicant’s ability to make mortgage repayments, especially if their income is in Singapore dollars.
UK Tax and Legal Implications
Owning and renting out property in the UK has tax implications. Expats should seek advice from a tax professional familiar with both UK and Singapore tax laws. Expats must comply with UK laws and regulations related to property ownership and being a landlord.
Consulting with a mortgage broker at Mortgage Lane with experience in Expat mortgages can be highly beneficial. They can provide insights into suitable lenders and help navigate the application process.
Our Director Joseph Lane was in Singapore in May 2024 showcasing Buy to let Mortgage options for UK Expats, we teamed up with a local UK property education training company in Singapore to provide an event covering all aspects of mortgages in the UK.
Yes, a UK Expat living in Dubai can obtain a buy-to-let mortgage for property in the UK. However, there are specific factors and requirements they need to consider:
Lender Availability: Not all UK mortgage lenders provide buy-to-let mortgages to Expats. Those that do often have specialised products for Expatriates.
Higher Deposit Requirement: Expats typically need to provide a larger deposit than UK residents, often around 25% to 40% of the property’s value, though this can vary depending on the lender.
Income and Affordability Assessment: Lenders will evaluate the Expat’s income (which may be in a currency other than GBP) and the projected rental income from the UK property. The assessment will also consider the stability and reliability of the Expat’s income.
Credit History: A UK credit history is beneficial, but some lenders may also consider international credit reports or require additional financial references.
Interest Rates and Fees: Expats might face higher interest rates and additional fees compared to domestic borrowers in the UK. It’s important to shop around and compare different mortgage offers.
Impact of Exchange Rate Fluctuations: Lenders might take into account the potential impact of currency exchange rate fluctuations on the Expat’s ability to make mortgage payments, especially if their income is in UAE Dirhams.
UK Tax Considerations: There are tax implications for owning and renting out property in the UK. Expats should seek advice from a tax professional who is knowledgeable about both UK and UAE tax laws
Regulatory Compliance: As landlords, Expats must comply with UK property laws and regulations.
Professional Advice: It’s advisable for Expats to consult with mortgage brokers or financial advisors who specialise in Expat mortgages. They can assist in finding suitable lenders and navigating the application process.
Property Management: Being an overseas landlord may require engaging a property management company in the UK to handle daily landlord responsibilities.
In summary, while UK Expats living in Dubai can secure a buy-to-let mortgage in the UK, the process involves additional complexities compared to standard domestic mortgage applications. Prospective borrowers should be prepared for a detailed financial assessment, understand the implications of exchange rate fluctuations, and seek professional advice to facilitate the process.
Yes, a UK Expat living in China can obtain a buy-to-let mortgage for a property in the UK. However, there are specific considerations and requirements that need to be taken into account:
Higher Deposit Requirements
Expats often need a larger deposit compared to UK residents. The deposit requirement can range from about 25% to 40% of the property’s value, although this varies depending on the lender.
Income and Affordability Assessment
Lenders will assess the Expat’s income, which may need to be converted into GBP, as well as the projected rental income from the property. They will also consider the stability and source of the Expat’s income.
Credit History
A UK credit history is beneficial, but some lenders may also accept international credit histories or require additional financial references.
Interest Rates and Fees
Expats might face higher interest rates and additional fees compared to domestic borrowers in the UK. It’s important to compare different mortgage offers.
Exchange Rate Fluctuations
Lenders might take into account the potential impact of exchange rate fluctuations on the Expat’s ability to make mortgage payments, especially if their income is in Chinese Yuan.
Tax and Legal Considerations
Owning and renting out property in the UK has tax implications. Expats should seek advice from a tax professional familiar with both UK and Chinese tax laws. As landlords, Expats must comply with UK property laws and regulations.
It’s advisable for Expats to seek advice from mortgage brokers such as Mortgage Lane who specialise in Expat mortgages. We can assist in finding suitable lenders and navigating the application process.
An interest only Expat mortgage is a mortgage, where you will only repay the interest on the principle amount borrowed. This can be useful for investors on buy to let mortgages, whereby they build this into their cashflow. However, for residential mortgages it requires more planning as “sale of security” isn’t so much of a widely accepted exit strategy for mortgages on primary residence.
A buy to let Expat mortgage is used to purchase a property that you intend to rent out to a residential tenant on one tenancy agreement. Usually people take Interest only but capital repayment buy to let mortgages are also available for Expats.
Yes, some lenders offer a 10% overpayment facility, per annum.
This means that if your principal loan was £125,000 then you could repay £12,500 per annum as an overpayment without incurring a penalty within your fixed term.
However, it is important to note that many lenders are stripping this from their product ranges, so it is always worth checking to avoid paying exit fees on amounts repaid.
Yes.
Some lenders who offer buy to let mortgages to first time buyers may limit the loan size to their maximum residential mortgage affordability. This will help the lender reduce any “back door buy to lets” this term is used by lenders for applicants looking to exploit the buy to let mortgage affordability rules to gain a higher loan size than they would otherwise be able to.
There is a way around being limited on loan size, you could buy on bridging first, refurb and refinance as a “property owner” rather than a first time buyer.
Yes. However, it is not advised, especially if you are buying in a traditional auction with just 28 days to complete. Traditional auctions are more generous on time, but if you are buying via the traditional auction route then it is unlikely you will get a mortgage offer and subsequently, legal searches of which some councils are taking over 6 weeks to return.
We assist our clients with buy to let mortgages in England, Wales, Scotland and Northern Ireland.
Yes, an Expat from the UK living in Australia can typically obtain a buy-to-let mortgage in the UK, but there are specific considerations and requirements that need to be taken into account.
Not all mortgage lenders in the UK offer buy-to-let mortgages to Expats. Those that do may have specific criteria for eligibility, such as a minimum income level, a history of UK property ownership, or a requirement for a UK bank account. Briskish Expats in Australia might face higher interest rates and additional fees compared to UK-based borrowers. It’s important to compare different mortgage offers and understand all associated costs, below are some considerations for UK Expat mortgages with applicants residing in Australia.
Higher Deposit
Expats often need to provide a larger deposit compared to UK residents. The deposit requirement can be around 25% to 40% of the property’s value, although this varies depending on the lender and the applicant’s circumstances.
Credit history
Having a good credit history in the UK can be beneficial. Some lenders may require evidence of a UK credit history, although others may also consider credit history from Australia or international credit reports.
Income
Lenders will assess the Expat borrowers ability to afford the mortgage. This includes evaluating income (which may need to be in GBP), rental income projections for the property, and overall financial stability. Lenders might take into account the potential impact of exchange rate fluctuations on the Expat’s income and ability to make mortgage payments, especially if their income is in Australian dollars.
Tax and Legal considerations
There are tax implications for UK property ownership and rental income for Expats. It’s advisable for Expats to seek advice from a tax professional familiar with both UK and Australian tax laws.
Expats must comply with UK property laws and regulations, including those related to landlords and rental properties.
It’s highly recommended to seek advice from a mortgage broker or financial advisor such as Mortgage Lane, specialising in Expat mortgages. They can provide guidance on suitable lenders, mortgage products, and the application process.
Yes, Expat lenders often have a minimum loan size for mortgages. A common minimum loan size for an Expat lender is typically around £100,000. However, at Mortgage Lane, we have access to a range of lenders, and some of them are willing to offer mortgages to Expats with a minimum loan size as low as £50,000.
This lower threshold can be particularly advantageous for Expats who are looking to invest in less expensive properties or who may not require a large loan. Our network and knowledge of the market enable us to match our clients with lenders that best suit their specific financial needs and circumstances, even when those needs involve smaller loan amounts.
Yes, a UK Expat living in Hong Kong can obtain a buy-to-let mortgage for a property in the UK. The process and considerations are similar to those for Expats living in other countries, but with specific nuances relevant to residents of Hong Kong. Here are the key points to consider:
Higher Deposit Requirement
UK Expats residing in Hong Hong typically need to provide a larger deposit than residents in the UK. This can range from about 25% to 40% of the property’s value, but it varies between lenders.
Income and Affordability Assessment
Lenders will assess the Expat’s income (which may need to be converted into GBP) and the potential rental income from the property. The stability and source of the Expat’s income will also be considered.
Credit History
Having a UK credit history can be beneficial, but some lenders may also consider international credit histories or require additional financial references.
Interest Rates and Fees
Expats might encounter higher interest rates and additional fees compared to UK-based borrowers. It’s important to compare different mortgage offers. The impact of exchange rate fluctuations between the Hong Kong Dollar and the British Pound can be a concern for lenders, especially regarding the Expat’s ability to make mortgage repayments.
Tax and legal Considerations
Owning and renting out property in the UK as an Expat has tax implications. It’s advisable to seek guidance from a tax professional familiar with both UK and Hong Kong tax laws. Legal and Regulatory Compliance: Expats must comply with UK laws and regulations pertaining to property ownership and being a landlord.
Consulting with a mortgage broker at Mortgage Lane, experienced in Expat mortgages can be highly beneficial. They can assist in navigating the application process and finding suitable lenders.
Whilst some Expat mortgage lenders do enforce a minimum income requirement (often £25,000-40,000), the some lenders do not have a minimum income requirement, as long as some level of an income can be evidenced.
A “day one mortgage” allows you to remortgage your property without the traditional waiting period. Historically, many buy-to-let lenders adhered to a “six month rule”, which posed challenges, particularly for investors employing the Buy, Refurb, and Refinance (BRR) strategy. If you’re an investor looking to capitalise on this approach, the good news is you no longer have to wait 6 months to remortgage the property based on its updated post-refurbishment valuation!
Buy to let and commercial mortgage products for Expats will usually want at least 20-25% of the property’s value because of the increased risks linked with these properties. In simple terms, they’re typically willing to lend you up to 75% of what the property is worth. We’re connected with other specialist lenders who might entertain a loan at an 80% Loan to Value ratio. However, such offers are generally earmarked for borrowers with a background in property rental. But lets not forget, whatever the maximum loan to value is, the property will need to “stress up” to be eligible for the loan size and therefore it will need to be affordable on its producing rental income.
If you’re an Expat looking to secure a mortgage in the UK but have a history of bad credit, working with expert brokers like Mortgage Lane can significantly improve your chances of success. Here’s how you can approach this process with their assistance:
Contact Mortgage Lane: Begin by reaching out to Mortgage Lane. As expert brokers, we specialise in handling complex mortgage scenarios, including those involving Expats and individuals with adverse credit histories.
Assessment of Your Credit History
Mortgage Lane will review your credit history to understand the specifics of your bad credit. This could include missed payments, defaults, or CCJs (County Court Judgments). Knowing the details will help them determine the best approach and which lenders to target.
Improving Your Credit Profile
They may offer advice on how to improve your credit profile. This could involve steps like paying off outstanding debts, closing unused credit accounts, or rectifying errors on your credit report. Mortgage Lane has access to a wide range of lenders, including those who are more receptive to Expats with bad credit. They can identify lenders who are more likely to approve your application based on your specific circumstances.
Guidance on Larger Deposits
Given your credit situation, you might need to offer a larger deposit to secure a mortgage. Mortgage Lane can advise on how much you should aim to provide to increase your chances of approval.
Remember, securing a mortgage as an Expat with bad credit can be challenging, but expert brokers like Mortgage Lane have the experience and knowledge to navigate these complexities. Their personalised approach and access to a broad range of lenders can significantly increase your chances of obtaining a mortgage that suits your needs.
No
Historically some lenders did have a minimum income for Expat Buy to Let mortgages, however, a lot no do not. There are still a few that require a minimum income, but rest assured that if you are earning below £25,000 there are plenty of buy to let mortgage options out there for you.
We arrange cost-effective BTL Expat mortgages for:
- Individuals
- Special Purchase Vehicles/Limited Companies
- Limited Liability Partnerships (LLP)
- Trading companies
- Charities
- On/Offshore Trusts
It is important to note that Buy to let mortgages are not covered by the Financial Services Compensation Scheme, so borrowers should ensure they are dealing with a reputable lender.
READ MORE ABOUT EXPAT MORTGAGES
At Mortgage Lane, we see the most complex of Expat mortgage applications, some of which make a good read for investors looking to learn from other applicants’ challenges, or for those effected by the topics! See more buy to let mortgage topics covered in our blog here.
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