Best Expat Mortgage Rates in the UK
Best expat mortgage rates in the UK.
Trying to get a mortgage as an expat in the UK can be difficult. You may be a UK resident (but non-UK citizen), or a UK citizen currently residing abroad, a British Expat – whatever your situation, there are generally more complications involved. Some of the reasons for this are:
- It’s harder to trace your credit history. Credit history is important to lending as it showcases your ability to take on and pay back debt.
- You may not be residing permanently in the UK. Lenders want to see that you appear to be somewhat settled in a country before they will lend to you.
- Your main source of income is not from the UK. If your main income is derived outside the UK, lenders might be wary of how secure the income is.
As you can see above, the factors that raise concern all relate to risk. Lenders are lending you money because they believe you will pay it back. The higher chance of you not paying it back, the more risk it poses to them.
Unfortunately therefore, as lenders deem expats to be higher risk, the mortgage rates that are available are higher. Not to mention the limited number of mortgage companies that offer this service, which only adds to the issue of higher rates due to the lack of competition in the market.
However, there are still options available to expats in the UK or formerly UK residents now residing elsewhere, and ways that you can increase your chances of getting a mortgage.
How can I improve my chances of getting a mortgage in the UK?
Due to the heightened risks involved with offering a mortgage to expats in the UK, it’s important you appear as low risk as possible. Some tips to help secure a mortgage are:
Have a secure form of UK income – You may have substantial income from overseas sources, but nothing is more attractive for lenders than seeing the income coming from the same country the mortgage will be based. This will be much easier if you are an employee of a UK company (and being paid through PAYE).
Lower loan to value ratio (LTV) – The larger deposit you have for a purchase, the better rate you can get on a loan and the less risk you are to lenders. This is because you are borrowing less money relative to the property you are purchasing.
Show a degree of permanence in the UK – This will only relate to you if you currently live in the UK. However, illustrating that you intend to remain in the UK over the longer term is attractive for lenders. If you have employment history over a few years, have built up a credit rating and a decent level of assets (low debt compared to assets held), you start to appear as lower risk.
Best expat mortgage rates
Generally, mortgage rates are not as favourable for expats which means you will be paying a higher rate for your lending.
It can be twice as expensive (in terms of rates) for an expat purchasing a property in the UK. Furthermore, the interest rates will potentially increase given the rises in the Bank of England’s base rate. It’s best to discuss your options with an independent broker who has access to lenders and can get the best loan for you.
Is there anyone who can help?
Here at Harrison Brook, we work with third party experts who can assist with UK property purchases. Please get in touch if you are assessing your options and we can pass your details across.