UK Expat Mortgages

Definition of UK Expat

• UK national working abroad
• Non-resident in the UK for tax purposes
• Different types of lender, different assessment to standard mortgage
• Lender will consider jurisdiction and currency paid in and convert back into sterling
• Then will apply a ‘haircut’, will remove between 15% to 20% of the income to account for currency variations
• If self-employed, more complex, but suggest align with large international accountancy firm so accounts prepared or audited by reputable firm, otherwise difficult to verify income
• If employed, lenders will want evidence company is legitimate and is not in ‘no-go’ Home Office jurisdiction

Can I get a mortgage as a UK Expat or mortgage for non UK citizen?

• If you are a UK citizen working abroad, you will invariably be paid in a foreign currency (but granted, not always). More lenders are coming to terms with this. So often getting a UK Expat mortgage is not a problem, but you do need to talk to the right lender as most High Street lenders struggle in this area.
• As a UK national living overseas as an expat you may wish to retain your existing UK property. Or you may wish purchase a property to rent out in your absence.
• This provides an income and a base for the future when you return, so an Expat buy to let mortgage UK may be appropriate.

Your Borrowing = 4.5 to 5.5 x your income

How much can I borrow with a UK Expat mortgage?

• The short answer is between 4.5 – 5.5 x your income, but how your income is assessed may differ from a UK Resident.
• Lenders may view you as a riskier prospect as your income may be regarded as less stable than if you were UK resident. For example, the lender may be unable to obtain your full credit history if you have been out of the country for a while.
• If your income is paid in an overseas currency, there are lenders with specific criteria who will consider an application. However, the lender will likely apply a “hair-cut” to offset currency fluctuations. You may also be required to undergo further identity and income checks than other borrowers.
• Potentially you may require a higher deposit. A deposit of around 25% is not uncommon.
• Another issue may be the country in which an expat is working. Lenders may be reluctant to consider an expat in countries where corruption is common, or money laundering is known to be prevalent.
• Lenders can be more cautious in ‘high risk jurisdictions’, which are outlined by the UK Government here. It does not stop you getting a mortgage, but it can be harder work.
• Also check your tax status with HMRC. If you purchase and rent out a Buy to Let property you may be classed as a “non-resident landlord” with an Expat Buy to Let mortgage UK.

Simple example

• Say earn $100,000 income
• Convert to sterling: $100,000/1.4 = £71,000
• Less ‘haircut’ of 15% = £60,000
• Apply multiple of 4.5 (£60,000 x 4.5) = £270,000

How much does a UK Expat mortgage cost and what are the Expat mortgage rates?

• UK Expat mortgages may attract a higher interest rate.
• Check with your expat mortgage broker on the current expat mortgage rates.

Essential to talk to an Expat mortgage broker

• It is essential to talk to an Expat mortgage broker that has access to the whole market.
• Your broker can also advise you on a mortgage for non UK citizen.
• It makes sense to look over the fence to what else is available for expat residential mortgages UK and your mortgage advisor is your best and easiest way of doing that.
• We have access to lenders, products, and underwriters that the general public simply do not.
• If you feel you fall into this Expat category please do pick up with one of the team we are very happy to help.
• It is a complex area but we do deal with it quite regularly and we know the people to talk to
• Ultimately, we want to make sure this is a stress free experience for you