Getting a mortgage on overseas property can be difficult in the UK, but it’s certainly possible. If you’re looking to buy a holiday home or retire abroad, it’s highly recommended that you speak with a broker who has experience in international mortgages and property for this type of specialist purchase.
Where in the world you intend to buy can impact whether you apply for a mortgage through a UK lender, an international one or a local lender in the property’s destination country. You can learn more about buying overseas in this article, or click here to speak to us now. Our experienced advisers will ensure the process is as straightforward and stress-free as possible.
Can you get a mortgage to buy an overseas property?
You can sometimes get a UK mortgage to buy overseas property, but it will depend where you plan to buy, what you plan to use it for, and, of course, your individual circumstances. Buying a home to retire abroad is likely to be easier than purchasing buy-to-let property, both in terms of getting a mortgage, and local customs. Some countries prefer foreign buyers to relocate if they are purchasing property, rather than buying as a UK-based landlord.
In some cases you may need an international lender, or even a local bank in certain countries. Whichever route you take into overseas property purchase, however, it’s likely to be less straightforward than buying in the UK. Be mindful of local regulations, taxes and licenses in both the destination country, and the UK if you apply for a mortgage here.
What your options would be
There are a few ways you could consider buying abroad, but which options are open to you will depend on where you buy and whether or not you plan to live in the property:
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Getting a mortgage with a UK bank - Only a few lenders offer overseas mortgages, and typically only lend in countries where they have active branches
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Getting an overseas mortgage in the country you plan to buy in - You’ll need to use a specialist overseas broker if you plan to arrange this from the UK. Keep in mind that while rates may be lower abroad, any fluctuations in the exchange rate will impact your repayments. You also won’t be covered by the Financial Conduct Authority (FCA) if you borrow from outside the UK
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Remortgaging your UK home to buy an overseas property outright - prices can be much lower in certain countries, so it may be possible to buy a property outright by remortgaging your current home, particularly if you have sizable equity
Lending criteria for overseas mortgages
Mortgages on overseas properties tend to have stricter criteria than mortgages on UK property, as lenders consider buying abroad to be higher risk. Here are some of criteria that you’ll likely need to satisfy in order to qualify for a UK mortgage overseas:
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Higher deposit requirements - You’ll usually need to provide a larger deposit (typically 15-50%) for this type of purchase, but the percentage can vary depending on where you plan to buy
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Possibly capped Loan to income (LTI) ratio - Lenders may limit lending on overseas properties to 4-4.5 times your income, whereas up to 6 times your income may be available on UK properties
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Property usage/type limitations - In some countries you may not be able to buy unless you plan to live in the property. Lenders may also have additional restrictions in terms of property use abroad, and property types that are acceptable. It can be more difficult to get a mortgage for a non-standard property abroad
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Country limitations - If you plan to borrow from a UK lender, most will only lend on properties in countries where they have branches. They may also not lend in certain countries due to high potential for political or economic instability
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Income related requirements - Some lenders only offer overseas mortgages to those with permanent employment, and may even limit this type of purchase to high net worth individuals
Noteworthy - If you opt for a mortgage with an overseas lender, many of them have a non-refundable deposit
How to get an overseas mortgage
Getting a mortgage for overseas property will vary depending on whether you borrow from home or abroad, but either way, taking advice from an experienced broker is strongly recommended.
Many lenders that offer overseas mortgages, and particularly international lenders won’t generally be available to the general public anyway, so you’ll need a mortgage broker with specific experience in this niche to help you access the right lender, and in some cases, a suitable estate agent and solicitor.
Like with any mortgage application, it’s important to get your finances in order before you apply, and ensure that you have researched the area and property in which you plan to buy.
Connect with an overseas mortgage specialist
Available mortgage lenders
There are a number of UK banks offering overseas mortgages, such as HSBC, Santander and Natwest. Typically those offering international banking services are most likely to be able to help with overseas mortgages.
If you’re unable to borrow with a UK lender, it may still be possible to borrow from a bank in the country you plan to move to. However, it can be more difficult to meet their lending criteria if you don’t already have a credit and employment history there.
Are the rates higher for overseas mortgages?
Oversea property mortgages offered by UK lenders tend to be more expensive than those offered on UK properties, due to the increased risk involved. Some people opt for a mortgage with an international lender to avoid higher interest rates, however, be sure to calculate exchange rate fluctuations, as they could impact both the final purchase price and the monthly repayments.
Why choose Money Helpdesk for your overseas mortgage?
If you’re looking for a mortgage for overseas property, whether you plan to borrow from home or abroad, we can provide you with expert advice throughout the entire process. At Money Helpdesk we have access to the whole market, so can connect you with those lenders who specialise in this niche.
No matter your circumstances, we have access to hundreds of specialist lenders and thousands of mortgages to help you find the best deal possible. Get started now.
FAQs
As with all bad credit mortgages, securing one will depend on the nature, age and severity of your credit issues. It’s likely to be more difficult to get an overseas mortgage if you have an adverse credit history, but it won’t necessarily be impossible.
Speaking to an experienced broker, like those we work with, will give you the best chance to get a suitable overseas mortgage, whatever your circumstances.