Can You Get a Mortgage in the UK When You Live Abroad?

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If you live overseas but wish to buy a property in the UK, you may be wondering if it is possible. You may have even approached mortgage lenders and had your application declined because you live abroad.

The good news is that there are mortgages available to borrowers who live overseas. These products are commonly known as Expat mortgages and are designed to allow you to buy UK property when living abroad.

Let’s discover Expat mortgages in detail.

Reasons for Buying a UK Property Whilst Overseas

There are several reasons why you might wish to buy a UK property when overseas. The most common reasons are:

  • To have a secondary residence in the UK
  • To generate income through Buy to Let
  • As an investment

With these reasons in mind, lenders have created flexible mortgage products to allow overseas borrowers to obtain a mortgage. The mortgage products themselves can be difficult to obtain due to strict eligibility criteria though and you will likely need to enlist a specialist mortgage broker to assist you.

What is an Expat Mortgage?

An Expat mortgage is a product offered by some lenders to people who live overseas.

Traditional mortgage products are unsuitable for overseas borrowers because they either stipulate you must be a resident in the UK, or you must use the property as your primary residence.

Expat mortgages avoid these restrictions and have other eligibility requirements instead. The eligibility requirements vary from lender to lender.

For example, HSBC has an Expat mortgage but to obtain one you must be an HSBC customer and have a specially designated HSBC Expat Bank Account. You must then meet one of the following three requirements:

  • Invest or save a minimum of £50,000 within three months of opening your Expat account
  • Have a minimum salary of £100,000
  • Be a HSBC Premier Customer in another region (subject to its own eligibility criteria)

Each lender has different requirements and to find an Expat mortgage you will need to match your personal circumstances with a lender who will accept you. This is where a mortgage broker is invaluable as they will be able to match you with a lender and alleviate the heavy workload of sourcing the mortgage yourself.

Typical Lender Requirements for Expat Mortgage Eligibility

Broadly speaking, there are a few requirements that are common across most Expat mortgage lenders. These are:

  • A high salary (typically more than £100,000 a year)
  • A UK bank account
  • Existing property in the UK
  • Be resident of a country considered low risk (EU Countries, US, Australia, Japan)
  • Good credit score and financial history
  • Stable and long-term income
  • Stable and long-term income
  • Ability to invest or save a lot of money with the lender
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How Do Expat Mortgages Work?

Once you have met the basic requirements for any given lender, you will then need to meet the mortgage requirements.

Expat mortgages are inherently risky for mortgage lenders for several reasons. The biggest reason is you will not be in the country to ensure the property is kept mortgageable. Aside from this, the fact a lender may have little jurisdiction to recoup money owed overseas creates additional risk.

As a result of this increased risk, you will find the interest rate on an Expat mortgage is typically a lot higher than a traditional mortgage product. To reduce the risk, lenders often insist on the criteria mentioned above and normally, the more requirements you can fulfil, the lower the risk you present to a lender and the greater the chances of a favourable interest rate.

You will also not be able to borrow less than £100,000 on an Expat mortgage. The reason for this is Expat mortgages are targeted at affluent individuals and lenders view borrowers unable to raise £100,000 themselves as too risky.

What Our Clients Have To Say

Buy to Let for Expats

With Buy to Let Expat mortgages you will need to demonstrate that the property you are buying meets the lender’s rental cover threshold (known as the rental coverage ratio)

These rental threshold covers vary between lenders and due to market changes in the Buy to Let sector these thresholds have been increased over the last year.

An example of a rental cover is your rent must be 145% of your monthly mortgage payment at a 6% interest rate. You may find this example wildly different to your actual rental cover requirements with your chosen lender due to interest rate and threshold increases.

Your chosen lender due to interest rate and threshold increases.
It is also important to note that if you have multiple UK Expat Buy to Let properties, a lender is likely to require this rental cover threshold to be met across your entire Buy to Let portfolio.

Your Country of Residence Matters for Expat Mortgages

Earlier we mentioned HSBC, a large banking corporation with branches all over the world. Most Expat mortgage lenders do not have the coverage that HSBC enjoys.

Even HSBC will restrict borrowing for those in high-risk countries. For example, if you are currently residing in Russia, you may find obtaining an Expat mortgage impossible.

If you are living in a country with a large unbanked population such as countries on the African continent, you will also find the avenues to obtaining an Expat mortgage severely limited.

Speak to an Expat Mortgage Specialist

Expat mortgages are complicated products and are mostly designed to help affluent overseas residents purchase property in the UK.

A mortgage broker will be able to assess your eligibility and then place you with the best Expat mortgage lender for your circumstances.

Boon Brokers is a Whole of Market Mortgage, Insurance and Equity Release Brokerage. Boon Brokers provides fee free mortgage advice.

Contact Boon Brokers to discuss your Expat mortgage today.

Gerard BoonB.A. (Hons), CeMAP, CeRER

Gerard is a co-founder and partner of Boon Brokers. Having studied many areas of financial services at the University of Leeds, and following completion of his CeMAP and CeRER qualifications, Gerard has acquired a vast knowledge of the mortgage, insurance and equity release industry.