Expat Residential Mortgage UK: Get Approved with a Foreign Income

In today’s interconnected world, many UK nationals are venturing abroad for work, education, or personal reasons. This growing expat community faces unique challenges when it comes to securing a mortgage to purchase a home in their homeland. Despite these hurdles, the desire for homeownership remains strong among UK expats, and the UK mortgage market has evolved to meet their needs.

The Expat Residential Mortgage market has seen significant growth in recent years:

• Growing Expat Population: The UK expat population is estimated to be around 5.4 million, representing a substantial market for expat mortgages.

• Increased Lender Choices: Many lenders cater to the expat mortgage segment, offering a more comprehensive range of products and tailored solutions.

In this article on expat residential mortgages in the UK, we will discuss all the possibilities of getting a residential mortgage for expats. We will talk about the requirements, the process of buying a property, and the different options available to expats.

Post Topics

What is an expat mortgage?

Can an expat get a residential mortgage(UK)

What are the eligibility criteria for an expatriate to get a residential mortgage in the UK?

Which are the most suitable mortgage lenders for expat mortgages?

Tips for getting an expatriate residential mortgage in the UK

What are the steps of getting a mortgage with foreign income?

Next Steps

FAQs

What is an expat mortgage?

An expatriate (or expat) is someone who lives in a country that is not their native country. Expat mortgages are the mortgage products offered to expats who wish to buy a residential and Buy-to-let property in the UK.

If you are an expat, you might be wondering if you can apply for a residential mortgage in the UK, and the good news is that it is possible. Still, there are stricter lending rules which may apply for lenders to determine whether to accept you for a mortgage loan.

The Expat Residential Mortgage market in the UK occupies a niche segment with distinct characteristics. Expat borrowers are often perceived as riskier due to their overseas residencyThe borrower's residency status, such as whether they are a ... and potential currency fluctuations. Consequently, lenders may implement stricter eligibility criteria and higher interest rates than conventional mortgages.

Can an expat get a residential mortgage UK?

Yes, UK expats can get a residential mortgage in the UK. Most of the major lenders in the UK will accept applications from expats, although there are some restrictions, such as minimum incomeThe minimum income required for a borrower to be eligible fo... requirements and other criteria that must be met. If you are a British citizen who lives abroad, you are eligible to apply for a residential mortgage in the UK. To get approved, you must meet specific eligibility requirements. These may include having a minimum income level and an acceptable credit score, as well as having sufficient savings for a deposit. Lenders will also consider your existing financial commitments when assessing your application. We suggest you contact a specialist mortgage broker to help you with your application process.

What are the eligibility criteria for an expatriate to get a residential mortgage in the UK?

The eligibility criteria for an expat to get a residential mortgage in the UK will vary depending on the lender. Still, there are some general requirements that most lenders will look for. These include:

• A UK credit history: A UK credit history is not essential, but it will help you to get a better interest rate and mortgage terms. If you don’t have a UK credit history, you may be able to provide evidence of your credit history from your home country.
• A deposit: You will typically need to have a deposit of at least 25% of the purchase price of the property. However, some lenders may offer mortgages with lower deposits, but the interest rates on these mortgages will typically be higher.
• A regular income: You will need to have a regular income that is sufficient to cover the monthly mortgage repayments. Lenders will typically look for borrowers who have a good employment historyA record of a borrower's employment history, which may be us... and who earn a salary that is at least three times the monthly mortgage repayments.
• Affordability: Lenders will also assess your overall affordability to make sure that you can afford to repay the mortgage. This will include taking into account your other debts and expenses.

In addition to these general requirements, some lenders may also have specific requirements for expat borrowers. For example, some lenders may require expat borrowers to have a UK-based guarantorA person who guarantees to repay a mortgage if the borrower ....

If you are an expat who is interested in getting a residential mortgage in the UK, it is important to shop around and compare different lenders to find the best deal for your circumstances. It is also a good idea to speak to a mortgage broker who can help you find the best mortgage for your needs and who can help you apply for a mortgage.

Which are the most suitable mortgage lenders for expat mortgages?

According to a recent article in Moneyfacts, a financial information provider, there are a limited number of high street lenders that offer mortgages to expats. However, there are a number of specialist lenders who offer expat mortgages.

HSBC offers expat mortgages, but borrowers may be subject to higher interest rates and must hold an HSBC Expat Bank Account. To join HSBC Expat, borrowers must keep at least £50,000 with the bank or have a salary of at least £100,000. 

Nationwide Building Society also offers expat mortgages, but with a maximum loan-to-value (LTV) of 75%, meaning borrowers must have a minimum deposit of 25%. Borrowers must also have at least three years of UK address history.

Suffolk Building Society is open to residential (and regulated BTL) applications from expats as long as their income comes from a list of 11 different currencies. The maximum LTVThe maximum loan is 80%, and borrowers cannot mix currencies. If borrowers are not paid in sterling, a 20% haircut will be taken off before their income is assessed for affordability.

Expats who are looking for a mortgage should speak to a specialist broker who can access a wider range of lenders and products.

Please note that the figures in this article are accurate as of November 9, 2023, but they may change in the future. For the most up-to-date information, please contact a mortgage lender or broker directly.

Tips for getting an expatriate residential mortgage in the UK

Getting a mortgage when you’re an expat could make it more challenging because you may lack a UK credit history, or perhaps you receive your salary in a foreign currency. With changes to financial regulations to protect consumers, lenders are now stricter with their lending activity and lender criteria than before. Here are some tips that can help you to secure UK mortgages and buy a residential property.

• You may need a larger deposit and pay a higher interest rate than UK residents.
• If you don’t have a UK credit history, you may need to provide evidence of your credit history from your home country.
• If you receive your salary in a foreign currency, lenders may want to verify your income more thoroughly.
• If you are self-employed or have a complicated income arrangement, it may be more difficult to find a lender.
• Speak to a specialist expat mortgage broker for help finding the best deal for your circumstances.

What are the steps of getting a mortgage with foreign income?

Here are the steps for getting a mortgage with foreign income:

1. Get pre-approved for a mortgage. This will give you an idea of how much you can borrow and what your monthly repayments will be. You can get pre-approved from a specialist expat mortgage broker or a direct lender.
2. Gather your documentation. You must provide evidence of your income, assets, and employment status. This may include payslips, bank statementsA record of a borrower's financial transactions often requir..., tax returns, and employment contracts. You may also need to provide evidence of your foreign income, such as bank statements or tax returns from your home country.
3. Find a lender. Not all lenders offer mortgages to expats. You will need to find a lender that specializes in expat mortgages, or that has a product that is suitable for your needs.
4. Apply for the mortgage. You will need to complete a mortgage application form and provide all of the required documentation.
5. Get your mortgage offer. If your mortgage application is successful, you will be given a mortgage offer. This will outline the terms and conditions of your mortgage, such as the interest rate, repayment period, and fees.
6. Sign the mortgage documents. Once you have accepted the mortgage offer, you will need to sign the mortgage documents. This will make the mortgage legally binding.

Next steps

If you are a non-UK resident looking to get a mortgage loan to buy a home in the UK, you may require the help of a mortgage broker. Getting help from a professional can help save you time and hassle and direct you to lenders who have mortgage products for expats. A mortgage broker will provide advice from their experience and expertise and be able to help you with your application process.

FAQs

What is an expat mortgage?

An expat mortgage is a residential mortgage product designed for individuals who reside outside the UK but wish to purchase or refinance a property within the UK. This type of mortgage caters to the unique circumstances of expatriates, often factoring in foreign currency and overseas employment status.

How to get an expat mortgage?

Securing an expat mortgage starts with a detailed mortgage application that considers your income, credit score, and deposit requirements. It’s advisable to consult with a specialist mortgage broker who understands the complexities of expatriate mortgage products.

What is the best type of mortgage for expats?

The best type of mortgage for an expat can vary based on their individual financial situation. Typically, a fixed-rate mortgage offers repayment stability, which could be beneficial given the variable nature of currency exchange rates. However, an expat mortgage calculator can provide a clearer picture based on the expat mortgage rates available.

Can British expats still buy property in the UK?

Yes, British expats can still purchase property in the UK. While the process may require a more complex income structure to be assessed, specialist expat mortgage providers cater to British expats to facilitate this.

Can I get a mortgage if I am working in Germany?

Yes, you can get a mortgage if you are working in Germany. You will need to provide evidence of your foreign income and employment status. However, some lenders may not offer mortgages to expats, so it’s advisable to find a lender specialising in this type of expat mortgage product.

Can I get a mortgage on a UK property if I work abroad?

Certainly, working abroadBorrowers who work abroad may have difficulty obtaining a mo... does not preclude you from getting a mortgage on a UK property. Lenders will look at your rental income potential and your overall financial health to make a decision.

Are there any specialist expat mortgage providers or lenders?

There are several specialist mortgage providers that offer mortgages for expats. These lenders often have a detailed understanding of the expat mortgage market and can offer more tailored mortgage solutions.

Can I get a mortgage on a property overseas?

Yes, though this would typically be considered an overseas mortgage rather than an expat mortgage, which usually refers to UK properties.

What are the expat UK mortgage application criteria?

The application criteria may include a minimum income requirement, proof of stable employment, and a good credit score. Providers may also assess your ability to cover mortgage payments in the light of any currency fluctuations.

What documents do I need for a UK expat mortgage application?

Typically, you’d need proof of identity, proof of income, possibly a mortgage cover letter explaining your situation, details of the property, and evidence of your deposit and ability to meet the booking feeA fee paid by borrowers to reserve a mortgage product. and other costs.

Why are buy-to-let mortgages for expats hard to find?

Buy-to-let mortgages for expats are less common because they pose a higher risk to lenders due to potential issues with foreign currency mortgages and the management of rental properties from abroad.

What recent changes have affected expat mortgages?

Recent changes in mortgage interest relief and tighter lending criteria have impacted the expat mortgage market. It’s vital to keep abreast of mortgage news and consult with an experienced mortgage broker to understand these changes.