Last Updated on 2nd October 2020
As an expat, you may want to invest in UK property. Not only can a buy to let provide you with an income, but you may have the option to live in the property yourself if you return to the UK. As a result, you’d likely need an expat buy to let mortgage to get started.
Buy to let mortgages for expats are assessed differently to mortgages for permanent residents. Even if you’re thinking about permanently moving back to the UK, most lenders will only use your most recent records of residence.
It’s important that you apply with lenders that understand you’ve lived abroad or will continue to live abroad. This is because it can sometimes cause lenders to withdraw later on in the application stage.
If you’re unsure of what to do, our advisors are able to help you at any time.
Is it difficult for expats to get a buy to let mortgage?
It’s often more difficult for expats to get a buy to let mortgage when compared to permanent UK residents. Nonetheless, it isn’t impossible. As an expat, an investment within the UK can often make sense. Furthermore, you may wish to return to the property at a later date, such as retirement, which isn’t uncommon.
As a result of an increase in expats investing in property, some lenders do now offer expat buy to let mortgages in addition to regular mortgage products. Nonetheless, lenders are more restrictive in their assessments. This is why it’s important to get your application right at the very start of the process.
Each lender that will consider you for a mortgage, will also have their own unique criteria which you’ll have to meet. For instance, one lender may have restrictions for applicants located in certain countries, whereas others won’t.
Some lenders won’t lend to applicants based in countries such as Australia and will only consider you if you’re based in Europe. On the other hand, there are lenders that will consider you irrespective of your location.
Most lenders won’t consider you if you’re a first-time buyer purchasing a buy to let. Don’t panic if you are, as there are a handful of lenders that may still say yes. Nonetheless, this will depend on the rest of your application meeting their criteria.
How to qualify for a buy to let mortgage as an expat
As each applicant’s circumstances will differ, there isn’t one answer for everyone. That being said, there are certain similarities which lenders will look for when assessing your mortgage. This can then help prepare you in getting your application ready.
The majority of lenders will require information on:
- Your current country of residence
- The currency in which you’re paid in
- Exit strategy (live in or sell the property at a later date)
- Any debt that you may have
- Your deposit amount
- Amount of history within the UK (credit file, UK bank account)
- Whether you pay tax in the UK
Having a great UK credit file, along with a sizeable deposit can place you in a better position than someone that has little UK history with a small deposit. Nonetheless, going to the right lender is perhaps the most important part of getting your mortgage agreed.
Lenders will also be interested in your long-term plans surrounding your investment property. For instance, will you be moving into the property at a later date or is this solely an investment which you’ll likely sell? These are types of questions you’ll need to be prepared for.
Underwriters often spend a lot longer when assessing expats for buy to let mortgages. This is because lenders aren’t used to foreign channels of verification and often includes delving deeper into an applicant’s file. Each country will have its own systems which your lender will likely not be accustomed to.
Expat buy to let mortgage rates
It’s important to note that buy to let mortgage rates for expats are typically higher than regular mortgages. This is due to the reduced number of lenders within this market, along with being a buy to let mortgage.
Buy to let mortgages are considered to be higher risk than residential mortgages, as landlords typically rely on rent to cover mortgage payments. With the additional risk of you living abroad, this particular mortgage becomes very high risk indeed. This is one of the main reasons why every lender doesn’t offer buy to let mortgages to expats.
Lenders may also charge higher fees in addition to slightly higher rates. Again, this is to offset some of the risks they’re taking in providing this type of mortgage. That being said, you may still be able to secure a favourable rate with minimum fees.
One way to unlock the best mortgage rates is to use a large deposit. Many lenders will require a 25% deposit at least, but having a deposit of over 40% can often unlock better deals. To be sure that you’re getting the very best rate, our advisors can check what rates you qualify for. We’ll then assess the likelihood of your application being approved.
How should an expat apply for a buy to let mortgage?
Perhaps the easiest way to apply for a mortgage is to speak to an advisor. As each applicant’s circumstances will vary, a tailored solution is often the best route. For instance, assessing your entire financial profile and country of residence is the first step to take. This will give us a better understanding of the lenders we’d be able to approach.
Once we have a number of eligible lenders, we’ll then begin comparing the best deals on offer. This isn’t as simple as finding the lowest interest rate, as we’d calculate the most viable deal across the entire length of the mortgage. Getting the right mortgage should be something to aim for if you want to generate the most from your investment.
Successful investment into property relies heavily on the numbers, which all begins with the price you pay for the property along with your mortgage deal. As an expat, your application will be assessed with a fine-tooth comb so it’s crucial to get everything right. If you are declined for any reason it can make getting a mortgage even more difficult.
Our advisors specialise in buy to let mortgages for expats. It’s a unique area as your country of residence can have a huge impact on how lenders view your application and the risk involved. You can make an enquiry with an expert and we’ll check to see the mortgages that are possible.