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Expat Mortgages
Mortgage Lane has clients from all over the globe, including Expatriates of the UK. We are specialists in Mortgages for Expats, advising on buy to let and commercial property. Whether you are first time buyer or an experienced portfolio landlord we are well versed with your situation.
PROCESS BREAKDOWN
1
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.
2
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) was approved, we can move to application stage where fees become payable.
3
Application, valuation & underwrite
Once the application is submitted, your valuation will be booked in and most of the time (depending on the lender). This will usually be complete after your initial underwriting. Once the valuation is returned, if acceptable, the lender would then look to make a formal offer. You can then move to legal stage.
4
Offer and completion
Once you have had your Expat mortgage offer, you will require adequate legal advice and then once you’re happy, your solicitor can draw this down 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 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. Expats mortgage lenders can either be relaxed or more cautious when lending to Expats in relation to minimum income and experience.
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.
Single let mortgages for Expats
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. Please see more information on stress testing in our FAQ.
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!
Specialist build types
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
HMO
For Expats it is key to have some form of property experience before seeking an Expat mortgage for a HMO property let to a Housing Association provider, otherwise you may be looking at less competitive interest rates.
Clients looking for mortgages on large HMO properties usually will require a lender using a local commercial valuer 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 60-80%.
Any 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.
Social housing mortgages for Expats
For Expats 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 provider, otherwise you may be looking at less competitive 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 requires detailed knowledge of each property’s lease agreement. It is essential for clients to provide Mortgage Lane with comprehensive lease details for the property they are looking to purchase or remortgage. 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.
In the realm of Social Housing Residential Buy to Let, we often encounter tenant types such as:
- Care leavers
- Individuals in need of assisted care
- Ex-offenders
By understanding the diverse needs of these tenant groups, we can ensure that the mortgage products we recommend are perfectly suited to the unique challenges and requirements of your Social Housing Residential Buy to Let property, guaranteeing a customised and efficient mortgage solution.
Heritage properties
Grade 1 and Grade 2 listed buildings are not always approved by Expat mortgage lenders, however the advisors at Mortgage Lane 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 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 Broker
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 are easy to reach, some do not deal with consumers directly. At Mortgage Lane we are used to complicated scenarios with Expat lending, so if you have even more added complications to your case, try out one of our expert mortgage brokers.Locations of our Expat clients:
- Australia
- Dubai
- Hong Kong
- Singapore
- China
- Europe
TRY OUR EXPAT MORTGAGE CALCULATOR
ANSWERS TO COMMON QUESTIONS AND QUERIES ABOUT EXPAT MORTGAGES
How is affordability calculated on 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.
Can I get an Expat Mortgage in the UK if I am living in Singapore?
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:
Lender Restrictions: Not all UK mortgage lenders offer buy-to-let mortgages to Expats. Those that do may have specific criteria and requirements tailored for Expat applicants.
Higher Deposit Requirements: Expats 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: 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.
Exchange Rate Fluctuations: 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 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.
Regulatory Compliance: Expats must comply with UK laws and regulations related to property ownership and being a landlord.
Professional Advice: 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.
Rental Management: Being an overseas landlord, it might be necessary to engage a property management company in the UK to handle day-to-day landlord responsibilities.
In summary, while obtaining a buy-to-let mortgage in the UK as an Expat living in Singapore is possible, the process can be more complex and demanding compared to standard domestic mortgage applications. Prospective borrowers should prepare for thorough financial assessments, consider the impact of currency exchange rates, and seek professional advice to ensure a smooth process.
Can I get an Expat Mortgage in the UK if I am living in Dubai?
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.
Can I get an Expat Mortgage in the UK if I am living in China?
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:
Lender Availability: Not all mortgage lenders in the UK offer buy-to-let mortgages to Expats, especially those living in countries like China. However, there are lenders who specialise in or are comfortable with lending to Expatriates.
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 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.
Legal and Regulatory Compliance: As landlords, Expats must comply with UK property laws and regulations.
Professional Advice: It’s advisable for Expats to seek advice from 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 day-to-day landlord responsibilities.
In summary, while it is possible for UK Expats living in China to 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 thorough financial assessment, understand the implications of currency exchange rates, and seek professional advice to facilitate the process.
What is an interest only Expat mortgage?
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.
What is a buy to let Expat mortgage?
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.
Can I overpay on my interest only Expat mortgage?
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.
Can First time buyers get an Expat mortgage?
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.
Can I use an Expat buy to let mortgage if I am buying at auction?
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.
Where do you broker Expat mortgages in the UK?
We assist our clients with buy to let mortgages in England, Wales, Scotland and Northen Ireland.
Can I get an Expat Mortgage in the UK if I live in Australia?
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:
Lender Criteria: 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.
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 and Affordability: Lenders will assess the Expat’s 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.
Exchange Rate Fluctuations: 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 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.
Legal and Regulatory Compliance: Expats must comply with UK property laws and regulations, including those related to landlords and rental properties.
Professional Advice: It’s highly recommended to seek advice from a mortgage broker or financial advisor who specialises in Expat mortgages. They can provide guidance on suitable lenders, mortgage products, and the application process.
Interest Rates and Fees: Expats 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.
Overall, while it is possible for UK Expats living in Australia to secure a buy-to-let mortgage in the UK, the process involves additional complexities compared to standard domestic mortgage applications. Prospective borrowers should prepare for a thorough financial assessment and consider seeking professional advice to navigate the process, our advisors at Mortgage Lane would be pleased to assist.
Do Expat lenders have a minimum loan size?
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.
Can I get an Expat Mortgage in the UK if I am living in Hong Kong?
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:
Lender Options: Not all mortgage lenders in the UK offer buy-to-let mortgages to Expats. However, there are lenders that specialise in or are comfortable with lending to Expats, including those living in Hong Kong.
Higher Deposit Requirement: Expats 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.
Exchange Rate Fluctuations: 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 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.
Professional Advice: 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.
Property Management: Since the Expat will be living overseas, they might need to hire a property management company in the UK to handle landlord responsibilities.
In summary, obtaining a buy-to-let mortgage in the UK while living in Hong Kong as a UK Expat is possible but involves additional complexities compared to standard domestic mortgage applications. Prospective borrowers should prepare for a comprehensive financial assessment, consider the impact of currency exchange rates, and seek professional advice to ensure a smooth process.
What income do I need to get an Expat mortgage?
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.
What is a day one Expat mortgage?
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!
How much deposit will I need for an Expat mortgage?
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.
How do I get an Expat mortgage with bad credit?
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, they specialise in handling complex mortgage scenarios, including those involving Expats and individuals with adverse credit histories.
Provide Detailed Information: Be prepared to provide detailed information about your financial situation, including your credit history, income sources, current debts, and any steps you’ve taken to improve your credit. Full disclosure is essential for Mortgage Lane to accurately assess your situation and find suitable lenders.
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.
Finding Suitable Lenders: 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.
Negotiating Terms: As brokers, they can negotiate terms with lenders on your behalf. Their expertise and relationships with lenders can be instrumental in securing a mortgage with more favourable terms than you might manage on your own.
Assisting with the Application Process: They will assist you throughout the application process, helping you gather necessary documents, fill out forms correctly, and meet all requirements set by the lender.
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.
Explaining the Impact of Exchange Rates: If your income is in a foreign currency, they can explain how exchange rates might affect your mortgage payments and overall affordability.
Ongoing Support and Advice: They can provide ongoing support and advice, even after securing a mortgage, especially if you have questions or concerns about managing your mortgage from abroad.
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.
Do I need a minimum income for an Expat buy to let mortgage
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.
What entities can take an Expat buy to let mortgage?
We arrange cost-effective BTL mortgages for:
- Individuals
- Special Purchase Vehicles/Limited Companies
- Limited Liability Partnerships (LLP)
- Trading companies
- Charities
- On/Offshore Trusts
Are buy to let Expat mortgages regulated?
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.
BEGIN YOUR EXPAT MORTGAGE JOURNEY WITH US TODAY
Let us know about your enquiry and one of the team at Mortgage Lane will be in contact to assist!