If you are an International Buyer and not a UK citizen, it is still possible for you to get a mortgage – a foreign national mortgage. This mortgage is available to the following three categories:
- You’re a non-UK resident/you don’t have permanent residency in the UK
- You were born outside of the EU but have indefinite leave to remain or permanent residency
- This may also apply in some ways you if you’re an EU resident too
Mortgages: The Options for International Buyers
UK property holds plenty of appeal for international buyers, but it doesn’t always make sense to bring all your money into the country to enable you to buy outright for cash. With low mortgage rates, there is a compelling reason for getting a mortgage rather than putting all your savings into UK property. An ever-increasing number of mortgage lenders are offering foreign national mortgages.
How to get a foreign national mortgage
The first step is to open a bank account and keep it active. Working in a permanent job in the UK is additionally a great way for making your application more attractive to banks. If neither of these is a feasible option for you, there are some lenders that accept mortgages paid from an overseas income or in foreign currency.
How your visa implicates the mortgage application
When it comes to foreign national mortgages, your visa type is very important as it will most likely determine your likelihood of being approved for a mortgage. It will also affect the criteria of checking how long you have been in the country and will stay there.
Here are the three main types of visas and what they could mean for your mortgage potential:
- Family visa:
These visas cover those who are married and live with their spouse, as well as blood relatives (child, parent etc.). There is an option for a joint application if you are a foreign national on these visas, which has many benefits, and it also allows you to work. - Tier 1 or Tier 2 Work visas:
The longer you have left on your Tier 1 or Tier 2 work visa, the higher the possibility of a successful application. Most lenders will request that foreign nationals have 1 to 2 years left on the visa, as this gives them more confidence that you are able to stay in the country long enough to cover payments for the full term of the mortgage. - EU citizen:
As an EU citizen, you are normally entitled to the same mortgages and lending options as a UK citizen but this is, of course, dependent on if you have credit history here that can count towards your application.
Foreign national mortgage rates and lenders
When trying to determine mortgage rates, it’s best to focus on averages, as they are so changeable. Mortgages for foreign nationals can also be a little complex, as being a foreign national may put you in a position where you are viewed as a higher risk to lenders.
Things that might affect this, or create a higher possibility of being declined, would be things such as adverse credit history, your source of income, the size of deposit you have and the type of property you’re looking to buy.
Factors to consider
There are some factors which will impact on how easy it will be for you to place a mortgage as a foreign national, that are important to consider.
- Property location
A centrally located, prime property in London or the Home Counties is favoured by most lenders. There are fewer lending options available outside of these areas. - Deposit size
A deposit of at least 25%, preferably 35%, is often required. - Income Sources
The source of your funds for your mortgage must be traceable to make a successful application. - Employment Status
If you are employed by a multinational organisation, your income will be easier to prove, and your case is more likely to be accepted. A reference from an international accountant must be provided if you own your own business or are self-employed. - Net worth and net assets
In respect to your net worth and net assets, the more liquid they are, the better. Holding cash and shares, rather than property, will open the door to a wider range of lenders. - Borrowing amount
It is important to consider that if you are not a UK resident, or if most of your income is generated internationally, generally you will need to borrow over £1 million. Placing Assets Under Management (AUM) with the lender may give you access to a broader choice of lenders.
How to proceed
There are many mortgage brokers and lenders that offer advice and further information when it comes to Foreign National Mortgages. We have recommendations on a few below for your reference: