Expat Mortgages: How UK Expats Can Borrow to Buy or Remortgage

What Is an Expat Mortgage?

An expat mortgage is a mortgage on a UK property for someone who lives and works outside the UK. It can be used to buy a home, buy to let, remortgage a property you already own, or release equity from it. The property is in the UK, but you, your income and often your bank accounts are somewhere else.

Many high street lenders will not lend to non-residents at all, and those that do apply tighter rules. That is why expat mortgages are a specialist area. The rules are not harsher for the sake of it. Lenders are managing risks they find harder to see from abroad: income in another currency, a credit history they cannot check, and the difficulty of recovering money if something goes wrong.

This guide explains who counts as an expat for mortgage purposes, the main types of expat mortgage, how much you can borrow, the deposit you need, how lenders treat foreign income, what it costs, what documents you will need and how the process works. It is part of our guide to expat financing. It is general information, not advice. Last reviewed.

Who Counts as an Expat for a Mortgage?

Lenders do not all define expat in the same way, but the term usually covers three groups.

• British citizens living abroad. You work or retire overseas and want to buy, keep or refinance a UK property.
• Foreign nationals buying in the UK. You are not British and do not live here, but want to invest in or move to UK property.
• Returning UK nationals. You are about to move back and need a mortgage before or soon after you arrive. Lenders sometimes call this a repat mortgage.

You may be employed by an overseas company, self-employed, a contractor, a seafarer, a diplomat or retired. What matters to the lender is where you live, where your income comes from, what currency it is paid in and how long you have been doing it. Your nationality matters less than most people expect.

Can Expats Get a UK Mortgage?

Yes, in most cases, but there are fewer lenders to choose from and each has its own rules. A small number of banks and building societies have specialist expat desks. Some private banks lend to higher-value clients. A few will only lend if you live in a particular list of countries, or if you already own a UK property. A refusal from one lender tells you very little about the others.

Your chances improve if you have a clear and stable income, a sizeable deposit, a UK address for post, a clean credit record and some UK financial ties, such as a bank account. They fall if your income is irregular, paid in an unusual currency, or hard to prove. A broker who works with expat lenders can usually tell you quickly which ones are worth approaching.

Types of Expat Mortgage

If speed matters more than rate, a short-term loan may fit better than a mortgage. See our guide to expat financing for how the options compare, or read about bridging loans for expats.

Expat Residential Mortgages

A residential expat mortgage is for a home you or your family will live in. It may be a property your children will use while you are abroad, a home you plan to move into when you return, or a place you will use on visits. Lenders usually need to know who will occupy it and may restrict letting it out.

Because these are loans to individuals buying a home to live in, they may be regulated, which can bring extra rules on affordability checks and advice. The market is narrower than for buy to let, so deposits are often higher and criteria stricter.

Expat Buy-to-Let Mortgages

Buy to let is the most common reason expats borrow in the UK. Lenders mainly judge it on the rent. They compare the expected rent with the mortgage interest, usually at a stressed rate, and expect a healthy margin. Typically that means rent of 125% to 145% of the interest, though it varies by lender and by whether you are a basic or higher rate taxpayer.

You will also need a bigger deposit than a UK resident. Many lenders ask for 25% to 40%. Some only accept expats who already own UK property, or who have previously lived in the UK. A few want a minimum personal income as well as rental cover. Check whether the lender expects a letting agent, a minimum tenancy of six months and a UK address for correspondence.

Holiday Let Mortgages

A holiday let mortgage suits a property you rent to visitors, and perhaps use yourself. Lenders look at how likely the area is to attract guests and how many weeks it could be let. Some allow the owner to stay for a limited number of nights each year, often between 30 and 90. Fewer lenders offer these loans to expats, so the choice is narrow.

How Much Can an Expat Borrow?

For a residential mortgage, most lenders base the loan on a multiple of your income, often four to five times. A buy-to-let mortgage is based more on the rent and the loan-to-value than on your salary. Either way, the figure depends on your currency, your debts and the lender’s own policy.

Lenders often count only part of income paid in a foreign currency, to allow for exchange-rate swings. A typical haircut is somewhere between 10% and 25%.

A worked example

The numbers below are invented to show the principle. They are not a quote or a typical result.

The same salary can support a smaller loan when it is paid in another currency. Ask each lender how they treat your currency before you set a budget.

Deposit and Loan-to-Value

Loan-to-value (LTV) is the loan as a percentage of the property’s value. A UK resident may buy with a 5% to 10% deposit. Expats typically need 20% to 25% for a residential mortgage and 25% to 40% for buy to let, which means an LTV of roughly 60% to 80%. A bigger deposit widens your choice of lenders and often lowers the rate.

Lenders will want to know where the deposit came from. They may accept savings, the sale of a property, a gift from family or an inheritance, but they will ask for proof. A deposit held in a foreign currency is usually acceptable, though the lender will want to see the money move and may ask for it to be converted before completion.

• Keep records of every transfer, with dates and amounts.
• Be ready to explain any large or unusual deposit.
• If a family member is gifting money, expect a signed gift letter and identity checks.
• Do not move the deposit through an account in someone else’s name without telling the lender.

How Lenders Treat Foreign Income

Your income is the first thing a lender looks at, and for expats it is the hardest to assess. Lenders ask three questions: is it stable, is it provable and can they convert it?

• Currency. Sterling, US dollars and euros are generally the easiest to use. Lenders may be stricter about currencies that move a lot or are hard to convert. Some accept only a short list.
• Employment. Permanent contracts are straightforward. Fixed-term contracts, probation periods and rolling renewals need explaining. Lenders may ask for a letter from your employer.
• Self-employment and contracting. Expect to supply at least two years of accounts or tax returns. Some lenders accept shorter histories if you have worked in the same field for longer.
• Bonuses, allowances and benefits. Housing allowances, tax-free packages and bonuses may be counted in full, in part or not at all. Ask early.
• Several incomes. Rental income or income from several countries can be combined, but each will be assessed on its own terms.

Credit History and UK Ties

A UK credit file is easier for a lender to read than an overseas one. If you have lived abroad for years, your UK file may be thin. Some lenders ask for a credit report from the country you live in, or for a reference from your overseas bank. Others lend with little credit history if the deal is strong.

You can help yourself by keeping some UK ties alive:

• keep a UK bank account and use it
• keep a UK credit card and pay it off in full
• stay on the electoral roll if you are eligible
• keep a UK address where post can reach you
• check your UK credit file for errors before you apply

Closing every UK account when you leave can make a mortgage harder to get later. It is worth leaving a small footprint.

Expat Mortgage Rates and Costs

Expat rates are often a little higher than rates for UK residents, because the lender takes on more risk and has fewer ways to check you. The gap varies, and specialist lenders can sometimes be competitive. There is no reliable best-buy table for expat mortgages, because the rate you are offered depends on your country, income, deposit and property. Be sceptical of any rate quoted without those details.

Compare products on the total cost over the time you plan to keep them, not just the headline rate. A low rate with a high fee can cost more than a slightly higher rate with none.

Does Your Country of Residence Matter?

Yes. Some lenders only lend to people living in a stated list of countries, and their lists change. A lender may accept applicants in Hong Kong, Singapore or the UAE but not in countries where it cannot easily check documents or enforce a charge. Sanctions and money-laundering rules can also rule out some countries altogether.

Where you live affects the choice of lender, the documents they accept, the time it takes and your tax position. It is the first thing to check, not the last. We will publish country guides for the places our clients live most often.

Documents You Will Need

• Passport, and sometimes a second form of ID
• Proof of your overseas address, such as a utility bill or tenancy agreement
• Employment contract and recent payslips, or accounts and tax returns if self-employed
• Three to six months of bank statements, for both your income account and your deposit account
• Proof of the source of your deposit
• Details of other properties, loans and credit commitments
• For buy to let, an estimate of the rent, and a tenancy agreement if the property is already let
• For a remortgage, your latest mortgage statement

Documents in another language may need a certified translation. Some lenders ask for documents to be certified by a solicitor, a notary or an embassy, which takes time. Ask for the lender’s list of acceptable certifiers at the start.

The Process, Step by Step

1. Set out what you want: the property, your budget, your timescale and your plans for the future.
2. Gather your documents while you look for the property.
3. Get a decision in principle, which shows what a lender is likely to offer. It is not a guarantee.
4. Make an offer, then instruct a solicitor.
5. Apply for the mortgage with the lender chosen.
6. The lender values the property and checks your documents.
7. You receive a formal offer, which your solicitor reviews.
8. Exchange contracts, then complete when funds are released.

Expect it to take longer than a standard mortgage, as overseas documents take time to check and certify. Allow several weeks at least, and more if the property is complex. Ask your broker for realistic timescales for your country.

Buying across time zones also means being available for calls and signing documents. Agree in advance who can act for you, if you cannot be reached, and whether a power of attorney is needed.

Remortgaging and Releasing Equity as an Expat

If you already own a UK property and have moved abroad, you can often remortgage it. You may want a better rate, a different type of loan, or to release equity for another purchase. The lender will treat you as an expat even if you have held the mortgage for years, so your current lender may not be the right one to approach.

A common problem is a property that started as your home and is now let. Your original lender may have given consent to let for a limited period, usually a year or two. Lenders generally dislike long periods of consent to let, and may want you to move to a buy-to-let mortgage instead. Check the position before it expires, and before any early repayment charge applies.

If you raise capital, lenders will ask what the money is for and may lend less against the property. If you need funds quickly, a secured loan may be an alternative.

Joint Mortgages With a Non-UK Partner

Buying with a partner who is not a UK national is common, and many lenders accept it. They will check the identity and income of both of you, and may look at visa or residence status if one of you is living in the UK. Some lenders cap the share of income they will count from a non-resident partner. If one partner has a much weaker credit history, it can affect the whole application.

Buying Through a Limited Company

Many investors hold buy-to-let property in a limited company. Lenders will lend to a company, but usually ask the directors to give personal guarantees. Rates and fees may be higher than for personal borrowing, and the tax treatment is different. Whether a company makes sense for you depends on how many properties you plan to buy, your tax position in the country where you live and your plans for the future. Take tax advice before you buy, not afterwards.

Tax When You Buy UK Property From Abroad

• Stamp Duty Land Tax. A surcharge may apply if you are not UK resident for tax purposes when you buy. Check the current rates and the residence test on GOV.UK.
• Income tax on rent. Rent from UK property is usually taxable in the UK even if you live abroad, and you may need to file a return.
• Capital Gains Tax. Non-residents can owe tax on gains from UK property. Check the current rules.
• Tax where you live. The country you live in may also tax the income or the gain. A double tax treaty may reduce the double charge.
• Inheritance Tax. UK property is within the scope of UK Inheritance Tax whatever your residence. Take advice on your estate.

We are not tax advisers. Speak to someone who understands the rules in both countries before you commit.

Protecting Your Mortgage

A mortgage is likely to be your largest debt. If you die, become seriously ill or cannot work, your family or your lender still needs to be paid. Our guide to expat mortgage protection explains how life cover can clear the loan, and our guide to expat life insurance covers cover for your dependants. For a broader look, see our expat insurance guide.

If you are borrowing against a UK property while planning for retirement, our guide to UK pensions for expats shows how property and pensions fit together.

Common Mistakes to Avoid

• Applying to several lenders at once. Multiple credit searches can reduce your chances. Get advice first on who is likely to accept you.
• Setting a budget before checking how income is treated. A currency haircut can cut what you can borrow.
• Moving all your money before you apply. Lenders want to see where funds came from.
• Letting a home without consent. Breaking the terms of your mortgage can lead to it being called in.
• Leaving out UK ties. Closing UK accounts can make lending harder.
• Ignoring exchange rates. A mortgage in sterling repaid from income in another currency carries risk if that currency falls.
• Forgetting the tax. Stamp Duty, income tax and capital gains can all apply.
• Leaving documents to the last minute. Certification and translation take time.
• Judging by rate alone. Fees, early repayment charges and flexibility all matter.
• Skipping protection. Without cover, your family is exposed if something happens to you.

Choosing an Adviser or Broker

Because the market is specialist, most expats use a broker. A good one should:

• be authorised by the FCA for mortgage advice, which you can check on the Financial Services Register
• explain how they are paid, including any fee from you and any commission from the lender
• have experience of lenders that accept your country and your type of income
• give you the reasons for a recommendation, in writing
• tell you if a mortgage is the wrong answer

Be wary of anyone who promises approval before they have seen your documents, asks for payment up front before any work, or pushes you to move quickly.

Frequently Asked Questions

1. What is an expat mortgage?
A mortgage on a UK property for someone who lives and works abroad. It can be used to buy, buy to let, remortgage or release equity.

2. Can I get a UK mortgage if I live abroad?
Usually yes, though fewer lenders will consider you and each has its own rules on countries, income and deposit.

3. How much deposit do I need as an expat?
Typically 20% to 25% for a residential mortgage and 25% to 40% for buy to let, depending on the lender.

4. How much can I borrow?
Often four to five times your income for a residential loan. Buy to let depends mainly on the rent and loan-to-value. Foreign income may be discounted.

5. Are expat mortgage rates higher?
Often slightly, because lenders see more risk. Rates vary with your country, deposit, income and property.

6. Which currencies do lenders accept?
Sterling, US dollars and euros are the easiest. Some lenders accept others, often with a larger discount or tighter rules.

7. Can I use foreign income to qualify?
Yes, with many lenders, though they may count only part of it to allow for exchange-rate risk.

8. Do I need a UK credit history?
It helps, but some lenders will consider you without a strong one. Keeping a UK bank account and credit card in use is sensible.

9. Can I get an expat buy-to-let mortgage?
Yes. It is the most common type. Lenders judge it mainly on the rent and usually ask for a bigger deposit.

10. Can I get a holiday let mortgage as an expat?
Some lenders offer them, but the choice is limited and they may restrict your own stays.

11. Can I remortgage while living abroad?
Often yes, but your current lender may not offer it to non-residents, so you may need a specialist lender.

12. What is consent to let?
Permission from your residential mortgage lender to rent out the property. It is usually limited in time, and lenders generally dislike long periods.

13. Can I buy with a partner who is not British?
Many lenders allow it. Both of you will be checked, and one partner’s status may affect the limits.

14. Can I buy through a limited company?
Yes, for buy to let. Lenders usually ask for personal guarantees, and the tax treatment differs. Take tax advice first.

15. What documents will I need?
ID, proof of address, income evidence, three to six months of bank statements, proof of your deposit and details of your other commitments.

16. How long does an expat mortgage take?
Longer than a standard mortgage, because overseas documents take time to check. Ask for a realistic estimate.

17. Can I get a mortgage if I am self-employed abroad?
Often yes, with at least two years of accounts or tax returns. A few lenders accept less if you have a longer track record in the field.

18. Can I overpay my mortgage?
Most lenders allow overpayments up to about 10% a year without a charge, but check the terms of your product.

19. Will I pay extra Stamp Duty?
A surcharge may apply if you are not UK resident for tax purposes when you buy. Check the current rules.

20. Do I pay UK tax on rent if I live abroad?
Usually yes. You may also owe tax in the country where you live.

21. Can I get a mortgage before I return to the UK?
Some lenders will consider it, for example with a job offer or contract. Others require you to be in the UK first.

22. Do I need life insurance with my mortgage?
Not always required, but worth considering. See our guide to expat mortgage protection.

23. Does my country of residence matter?
Yes. Lenders have lists of countries they accept, and the list changes. Check it first.

24. Do I need a broker?
Not by law, but the market is specialist and a broker who knows expat lenders can save time. Check they are FCA authorised.

25. Is an expat mortgage the same as an overseas mortgage?
No. An expat mortgage is for UK property bought by someone living abroad. An overseas mortgage is for property in another country, which we do not cover here.

Glossary

• Loan-to-value (LTV): the loan as a percentage of the property’s value.
• Decision in principle: an indication of what a lender may offer, not a guarantee.
• Consent to let: a lender’s permission to rent out a property bought on a residential mortgage.
• Currency haircut: the share of foreign income a lender leaves out to allow for exchange-rate risk.
• Rental cover: the rent as a multiple of the mortgage interest, used for buy to let.
• Early repayment charge: a fee for repaying or switching during a fixed period.
• Personal guarantee: a promise by a director to repay a company’s loan if the company cannot.
• Source of funds: proof of where the deposit came from.
• Repat: a UK national returning to live in the UK.
• Double tax treaty: an agreement between two countries about which can tax certain income.

Thinking About a UK Mortgage From Abroad?

Speak to us before you apply anywhere. We will look at where you live, how you are paid and what you want to buy, and tell you which lenders are likely to say yes. Request a callback.

Risk warning: Your home or property may be repossessed if you do not keep up repayments on your mortgage. Rules and lender criteria can change and depend on your circumstances.