Mortgages for Foreign Nationals

If you're a foreign national looking to buy a property in the UK, you might be wondering if you can get a UK mortgage. The truth is, it’s possible, but it can be a fairly tricky process, depending on your status in the UK.

We look at how to get a mortgage in the UK as a non-UK national, no matter which type of visa or residency status you currently hold.

Can you get a mortgage as a foreign national?

Foreign national mortgages are available in the UK, but the criteria for borrowing are usually different to that of UK citizens or residents. You may find it challenging to get a mortgage from a traditional high street lender, but there are some major banks happy to lend to foreign nationals, depending on their residency and visa status.

A few things that can be problematic are:

• Credit history - if you haven’t been in the UK long it’s unlikely you’ll have a UK credit history, making it difficult for lenders to assess your financial history

• Your visa status - not all lenders consider all types of visa

• Length of time in the UK - some lenders require you to have lived in the UK for a minimum term

• Income style - If your income is from outside of the UK and/or not paid in GBP this will be an issue for some lenders

• Non-UK funds - Not all lenders accept deposit funds from overseas bank accounts

However, no matter your status, using a mortgage broker with specialist knowledge in mortgages for foreign nationals, like Teito, can be hugely beneficial in securing the finance you need. We understand the challenges faced by non-UK residents when applying for a UK mortgage, and have access to the whole of the market, including those who accept applicants on a working visa, with pre-settled status and without indefinite leave to remain.

Below we look at how your visa status will impact your mortgage application:

Tier 1 Visa

Tier 1 Visas were intended for highly skilled workers migrating to the UK, such as entrepreneurs and investors, however key changes to this entry route means that far fewer people now qualify through this scheme. Some Tier 1 investors are able to extend their settlement until 2028, however, meaning lenders may still consider Tier 1 applicants.

Tier 2 Visa (Skilled Worker Visa)

It’s certainly possible to get a tier 2 visa mortgage with certain lenders in the UK. A tier 2 visa has officially been known as the ‘Skilled Worker visa’ since December 1, 2020. In the past couple of years changes to this visa; such as an increase in the minimum salary for sponsorship, an increase in the minimum skills threshold for occupations below RQF level 6, and the removal of 121 occupations from the eligible list, means that lenders will want to be sure that your visa is not for a ‘time-limited occupation’.

Not all lenders accept applicants on a tier 2 skilled worker visa, and the lending criteria can vary from lender to lender. However, most will want you to have a reasonable amount of time left on your Tier 2 visa, which can indicate your intentions to remain in the UK.

Pre-settled status

Some mortgage lenders will consider applicants with a pre-settled status, depending on the duration of your residency in the UK. Again, criteria varies, with more specialist lenders tending to be a bit more flexible with this type of application.

Can you get a mortgage without indefinite leave to remain in the UK?

Many lenders, especially larger high street banks, prefer that applicants have the right to remain in the UK indefinitely when they make a mortgage application. However, there are also plenty of lenders willing to consider those on valid work visas.

Spousal visa

It’s possible to get a mortgage in the UK on a spousal or family visa, as they provide you permission to work in the UK. Most lenders are likely to prefer that you’ve been in the UK for at least 2 to 3 years while on this type of visa.

Student visa

Fewer lenders offer mortgages to those on a student visa, as you will usually need a full time job, which many students are unable to fulfil alongside their studies. That said, it’s not impossible, and may be easier if you’re applying jointly with a UK national. Those with a clear path to a steady career in the UK, such as medical students, may also have a greater chance of approval.

What is the mortgage criteria for foreign nationals in the UK?

The criteria for foreign national mortgages in the UK depends on the type of visa or residency status you have. It’s also important to note that mortgage lenders have widely ranging requirements, so being refused a loan by one won’t necessarily mean that you’re not eligible at all.

Below we look at the major factors mortgage lenders consider when assessing foreign national mortgage applications:

• Visa type - Lenders typically prefer a long-term visa arrangement, such as tier 1, Skilled Worker (tier 2) and spousal visas or settled/pre-settled EU status (right to reside), rather than a student visa. However, certain lenders are more flexible than others

• Length of time remaining on visa - Many lenders stipulate a minimum time left on your visa at the time of application, which varies by lender. Broadly, the later the expiration date of your visa, the greater chance you have of approval

• Length of time residing in the UK - Most lenders like to see a reasonable history (2-5 years) of living and working in the UK. It’s possible to get a mortgage with less than 3 years in the UK, and some lenders even accept 12 months as a minimum, but you may need a larger deposit in this instance

• Income - Many lenders will prefer that your income is from a UK source, and may require that it’s held in a UK bank account. This is particularly the case for skilled worker (tier 2 visa) holders, as their sponsorship is linked to a UK income. Specialist lenders may be willing to accept more complex income types and income from overseas accounts in certain circumstances

• Credit history - If you’ve not been in the UK for long, it’s likely that your credit history is from outside of the UK. As credit reports are not shared between countries, this can make it hard for lenders to assess your financial responsibility. However, not all lenders assess your creditworthiness in the same way, so it may still be possible to get a mortgage without a UK credit history, so long as you approach the right type of lender

• Deposit requirement - Deposit requirements can be stricter for foreign nationals, as The maximum loan to value (LTV) is usually lower than for standard UK mortgage applicants. You’re likely to need around 20%-40% deposit if you're on a working or spousal visa. You may also need to prove that deposit funds are held in a UK bank, although this is not true of all lenders

Aside from the general requirements above, each lender may also have their own specific criteria to meet, such as minimum income requirements (aside from those attached to working visas) or not accepting foreign nationals from certain countries of origin. Support from a knowledgeable mortgage broker when you’re looking for a foreign national mortgage can be crucial in securing the loan you need.

At Teito, we help non-UK nationals to find the right lender for them regularly, as we know the criteria well, and can ensure you apply with lenders most likely to consider your circumstances.

Which lenders are available?

There are many lenders in the UK who will consider foreign national mortgages, but most require applicants to have an active visa if they don’t have indefinite leave to remain. Each lender has their own distinct criteria, and specialist lenders tend to be more flexible than bigger high street names.

That said, there are some recognised banks that may consider applications from certain non-UK nationals. Below are just some examples of the various UK lenders who are open to this type of lending, and the criteria you’ll need to meet in each case:

• HSBC - Must have lived in the UK for 1 year and earn at least £75,000 (or £100,000 between joint applicants). Maximum LTV 85%

• Barclays - Must have lived in the UK for 1 year and have indefinite leave to remain. Those without indefinite leave to remain are only considered if they are Barclays Wealth or Barclays Premier customers

• Halifax - Usually you will need indefinite leave to remain. If not, you would need to have been resident in the UK for 5 years and have individual income above £75,000 (or £100,000 between joint applicants

• Natwest - Offer non-UK resident mortgages to those with and without indefinite leave to remain. If you do not have indefinite leave to remain you can borrow a maximum of 75% LTV and must have at least 6 months remaining on your visa

• The Nottingham - Only accepts foreign nationals with indefinite leave to remain and who have been living in the UK for at least 2 years

• Virgin Money - Non-UK/Irish nationals with permanent right to reside and work in the UK or a settled or pre-settled EU Settlement Scheme status are accepted on standard lending policy. All applicants must be resident in the UK and have a 3 year consecutive UK address history. Usually they also require a working visa and minimum income of £75,000

How much are the interest rates?

Mortgages for foreign nationals, especially those with indefinite leave to remain in the UK are seen as riskier than mortgages for UK residents. This means that mortgage interest rates tend to be higher than they are on other mortgage types.

This is not always the case, and very much depends on the lender, but typically rates of between 4% and 6% are available. Those applicants who are considered higher risk, for example, if they earn their income from overseas, or have no UK credit history, will likely pay higher rates than those with a stable UK income and credit file.

You can use our interactive rates table to search for the latest interest rates available from each lender, or click on ‘enquire now’ to speak to one of our team about securing the best rate.