HomeBuy to LetBuy to let mortgages for UK expats

Buy to let mortgages for UK expats

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HomeBuy to LetBuy to let mortgages for UK expats

Buy to let mortgages for UK expats

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Last reviewed on 18th August 2021

Property investment is popular with UK expats and there are a number of reasons why.

Not only can a buy to let provide you with an income, but you may have the option to live in the property on return to the UK. You’d likely need a buy to let mortgage specifically for expats should you wish to do this.

Buy to let mortgages for expats are completely different from mortgages for permanent UK 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 lenders will decline applications that aren’t clear from the start.

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Is it difficult for expats to get a buy to let mortgage?

It can be difficult to get a buy to let mortgage as an expat, especially when compared to permanent UK residents. That being said, mortgage approval is possible.

As there’s been an increase in property investment from overseas, some lenders now offer investment mortgages just for expats.

Nonetheless, lenders are more restricted in their assessments for overseas buyers. 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. This will depend on the rest of your application meeting their criteria.

Learn more: How to get a buy to let mortgage as a first-time buyer

How to qualify for a buy to let mortgage as an expat

As an expat’s circumstances will be unique, there isn’t one answer for everyone. That being said, there are certain similarities that lenders share when assessing mortgage applications. This can help to prepare you for getting your application ready.

The majority of lenders will require information on:

  • Your current country of residence
  • The currency in which you’re paid
  • 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 applicants with little UK history and a small deposit. Nonetheless, going to the right lender is perhaps the most important part of getting your mortgage.

Lenders will also be interested in your long-term plans surrounding your buy to let property. For instance, will you be moving into the property at a later date or is this solely an investment that you’ll likely sell? These are the types of questions you’ll need to be prepared for.

Underwriters often spend a lot longer when assessing buy to let mortgages for expats. This is because lenders aren’t used to foreign channels of verification and will therefore investigate further into an applicant’s file.

Each country has its own systems which your lender will likely not be accustomed to.

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Do expats have to pay higher 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 an investment 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 some lenders won’t consider buy to let mortgages for expats under any circumstances.

It’s possible that you may be charged higher fees in addition to slightly higher rates. Again, this is to offset some of the risks lenders take when providing this mortgage type.

That being said, you may still qualify for a favourable rate with minimum fees. It simply depends on the strength of your application.

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 unlock better deals.

To be sure that you’re getting the very best rate, speak to an advisor that can compare rates across multiple lenders. We’ll also assess the likelihood of your application being approved.

How should an expat apply for a buy to let mortgage?

Assessing your entire financial profile and country of residence is the first step to take. This will give you a better understanding of the lenders you’ll be able to apply with.

Once you have a number of eligible lenders, you can then begin comparing the best deals on offer. This isn’t as simple as finding the lowest interest rate, as you’d need to 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 property investment 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.

Your country of residence can have a huge impact on how lenders view your application. You can make an enquiry with an expert and we’ll check to see the mortgages you qualify for.

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About the author

Mortgage Advisor | More Articles

Martin is a senior mortgage advisor and has held a CeMAP qualification for over 15 years while also completing an MBA in Global Banking & Finance.