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Mortgage Advisor & Director
If you’re an expat looking to buy a property in the UK, either to return home or as an investment, you’ll need an expat mortgage. While the mortgage itself is no different to any other mortgage, far fewer lenders are available to expats, so those offered by willing lenders tend to be referred to as ‘expat mortgages’.
We look at the availability of expat mortgage lenders, what criteria they have, and how Teito can help you to secure the finance you need.
Can an expat get a mortgage in the UK?
It’s possible to get a mortgage in the UK as an expat living abroad, but it’s certainly more challenging than it is for those based there. Lenders consider borrowing from abroad higher risk, meaning that fewer are willing to consider expat applications.
The main reasons for this are:
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Your UK credit score is likely to be low, depending on how long ago you left the UK. Credit reference agencies hold credit record for six year, so if you’ve been abroad longer than that, it’s likely that you will no longer have a credit history in the UK
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It’s likely that your income is earned in the country you reside in, which usually also means that it’s in a different currency. Lenders can be more cautious with overseas income
If you already own a home in the UK and need to remortgage, this can be easier than applying for a new mortgage from abroad, especially if you have substantial equity in your UK home. However, some lenders will include a clause requiring you to spend time at the UK property, so this may be more useful to those who regularly move countries, such as military employees.
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The products available work exactly the same as any other UK mortgage, however, the criteria is usually much stricter. There is a greater burden on expat applicants to prove their mortgageability.
Expat mortgage criteria vary from one lender to the next, however, they are all likely to look at similar factors, as described below:
Eligibility criteria
Eligibility requirements for an expat mortgage are as follows:
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Deposit requirement - Anti money laundering regulations are likely to be more stringent when it comes to using international funds as a mortgage deposit, so it’s even more important to ensure you can evidence the legitimacy of your deposit. Deposit requirements are also likely to be higher due to the increased risk of lending to overseas applicants, so you’ll likely need at least 20-30% deposit, and possibly more for an investment mortgage
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ID - Some lenders may ask to see proof of residency for the country you reside in, as well as a UK passport. In some cases you may be required to return home to the UK to meet with the lender in person, especially if you’re classified as a high-net worth individual
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Country of residency - Not all lenders accept expats living in every country. It can be harder to qualify for a UK expat mortgage if you live in a country that is blacklisted by the UK, for example. These are typically countries known to have high levels of corruption, money laundering activity or economic uncertainty
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Length of time abroad - Although not all lenders will accommodate expats, those that do may require you to have lived outside the UK for a minimum term of 2-3 years
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Income and affordability - Some lenders only consider UK income, and others will accept income in other currencies, but only if it's deposited into a UK bank account. If you earn your income internationally, especially if it’s from multiple currencies, it’s important to ensure that you apply with a lender who accepts the specific currency type(s) that your income is paid in. If you’re self-employed it’s a good idea to have your accounts authorised by an internationally recognised accountant. Lenders may also carry out more stringent stress testing on your income, which means your LTI (loan to income) value could be restricted.
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Credit status - If you’ve been an expat for longer than six years you’re unlikely to have a credit status in the UK. This can be a problem for some lenders, however, there are some who will accept alternative assurances. It’s unlikely that you’ll find a lender willing to accept your expat mortgage application if you have a history of bad credit in the UK, however.
How to get an expat mortgage
The good news is, there are a few things you can do to make getting an expat mortgage in the UK easier. Simply follow the three steps below and you’ll increase your chances of securing the best expat mortgage for your needs:
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Save a substantial deposit - Save at least 20% deposit, but the more the better, and ensure you have well documented records of your deposit’s origin
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Prepare - As you can see from the list of criteria, you’ll need to go much further to prove you’re a safe bet to mortgage lenders, so it’s wise to prepare in advance of your application. Gather as much evidence of income as possible, translated into English where applicable. Have any residency and ID documentation available to hand, as well as currency conversions for your income, where this is not in GBP
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Speak to a specialist expat mortgage broker - Expat mortgages are an incredibly niche area of lending, with fewer lenders available. Those lenders available have strict and wide reaching criteria which can vary considerably. That’s why it’s crucial to seek out specialist advice when you’re looking for this type of mortgage.
At Teito we have substantial experience of arranging expat mortgages and overcoming the unique challenges that apply to this form of mortgage lending. Speak to one of our helpful team for expert advice on the options available to you.
You can get started with your broker below or choose the option to compare rates if you would prefer to browse the mortgages on offer in real time first:
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Are mortgage rates any different for expats?
Yes, rates tend to be more expensive for expats, due to the increased risk in overseas mortgage lending. As there are fewer lenders available, this also means that there is less competition with expat mortgage rates.
However, as with any other mortgage, interest rates will be based on your individual circumstances, so it’s advisable to search the market to ensure you get the best rate available for your circumstances. You can compare the latest rates available by using our free whole-of-market mortgage comparison tool below:
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Expat buy-to-let mortgages
It’s perfectly possible to get an expat buy-to-let mortgage, and in fact, some UK lenders specialise specifically in investment mortgages for overseas borrowers. However, given the commercial nature of buy-to-let, similarly to UK buyers, you should expect to pay more than those purchasing a residential home.
Criteria are similar to those applicable to UK-based buy-to-let borrowers, although the amount of rental income required is likely to be higher. Lenders will also typically consider the criteria listed above relating to identification, residency, income and credit score. Deposit requirements are typically higher than for UK investors, and it’s likely you’ll need at least 40% deposit in order to secure an investment mortgage.
Can you get an HMO mortgage as a UK expat?
It’s possible to get a buy-to-let mortgage for an HMO (House of Multiple Occupancy) property if you’re an expat, but your lender options are likely to be limited to those specialising in expat investment mortgages.
Keep in mind that you’ll need to meet the licensing requirements, which can be more difficult if you’re an expat. Certain councils may not approve licensing applications from overseas applicants, however, this will vary from one council to the next.
Available mortgage lenders
There are only a handful of high street lenders offering mortgages to UK expats, although specialist lenders are also available in this niche. However, many specialist lenders can only be accessed via intermediary, meaning you’re more likely to need a mortgage broker to secure this type of mortgage.
Here are some examples of UK lenders who may accept expat applications:
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HSBC - Offers residential and buy-to-let mortgages for expats, however they will only consider applicants through an intermediary on their approved list
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NatWest International - This is a subsidiary of NatWest that specifically provides mortgages to non-residents, including UK expats
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Skipton International - This is a subsidiary of Skipton Building Society which exclusively offers expat mortgages to those looking for residential and buy-to-let mortgages
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Barclays - Has a department focussed on investment mortgages only for non-residents, this includes UK expats
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Santander International - This international subsidiary of Santander specifically offers buy-to-let mortgages for UK expats
Why choose Teito for your expat mortgage?
Teito are UK expat mortgage specialists with expert knowledge of lender criteria and access to intermediary-only lenders across the market. We can help you to find the right lender for your specific set of circumstances and avoid the disappointment of approaching lenders who don’t accept income in your currency, or applicants from your country of residency.
We know how to assess complex, multiple-currency income, including from high-net worth individuals. We also give you full access to mortgage rates allowing you to select your own if preferred, however, please note that our calculator won’t be able to show all expat mortgage options available.
We offer a 5-star rated service and your initial consultation is always free of charge, so reach out today to speak with an expat mortgage expert at Teito - get started here.
FAQs
This can vary from lender to lender, but most will allow you to borrow around 4.5 times your annual income. However, keep in mind that your maximum loan-to-value (LTV) ratio is likely to be between 70%-80%, which can limit the size of the loan available to you.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.