Expat Mortgages Explained | How To Get A Mortgage As An Expat

Introduction

Welcome back to our channel and podcast Let’s Talk Money and Mortgages.
Today, Gemma is joined by Ifdee, a trained accountant, mortgage broker, and one of the founding partners at WIS, with over 10 years of industry experience.
We’ll be answering popular questions about expat mortgages, including lending criteria, tips for applying, and common challenges.

What is an Expat Mortgage?

Q: What is an expat mortgage?
A (Ifdee):
An expat is a citizen of one country living in another. For example, if I’m a British citizen working in Hong Kong, I’m classified as an expat.
Because of this status, standard UK mortgages don’t apply. Instead, you need an expat mortgage.

First Steps When Moving Overseas

Q: What’s the first thing you should do if you have a mortgage and move overseas?
A:
Inform your bank that you’re going overseas.
Apply for “consent to let” if you plan to rent the property out.
This is important because:
You may violate mortgage conditions otherwise.
Insurance policies can be affected (many require notification if a property is vacant for 30+ days).

Q: What if you’re not renting it out, just leaving it vacant for a year?
A:
You still need to inform the bank. Vacant properties create risks (burglary, squatters, invalid insurance), so disclosure is always required.

How Does Being an Expat Affect Your Mortgage?

A: Key differences include:
Currency – Income earned abroad is converted into GBP. Lenders may apply a haircut (e.g., 25% reduction) to account for exchange rate fluctuations.
Limited lender options – Not all banks offer expat mortgages.
Physical presence – Some banks may require you to visit the UK in person.
Higher rates – Interest rates are often ~1.5% higher than standard residential mortgages.

Remortgaging as an Expat

Q: How does remortgaging work if you’re abroad?
A:
Some lenders require in-person meetings in the UK.
Others are more flexible, so brokers can help find the right lender.

Types of Residential Expat Mortgages

A: There are two main categories:
Returning expats – Moving back to the UK (often easier if transferring within the same multinational company).
Family relocation – One family member continues working abroad while the family buys a UK property.
Note: If someone wants to buy but won’t return for many years, it’s more difficult due to concerns over vacancy and property management.

How Easy Is It to Get a Residential Expat Mortgage?

A:
For the first two categories, it’s usually possible with proper paperwork.
Complexities can include translation of payslips, accounts, or documents (especially in non-English languages).
Brokers play a key role in handling translation, certification, and presenting applications smoothly.

Buy-to-Let Mortgages for Expats

Q: Why are buy-to-let mortgages popular with expats?
A: Three main reasons:
Consent to Let Conversion – Many start with consent to let, then switch to buy-to-let after settling abroad.
Investment Advantage – UK properties in GBP benefit from:
Exchange rate gains
Capital appreciation
Rental profit
Company Purchases – Some expats invest via UK companies (fewer lenders available).
New Trend: Growing demand for Islamic mortgages, which avoid interest and operate on profit-sharing models.

Factors That Affect Expat Mortgages

Lenders look at:
Currency stability – Stronger currencies (USD, EUR) are preferred.
Document translation – Non-English payslips/accounts must be translated and certified.
Taxation – UK tax returns are required for UK rental income. Double Taxation Treaties may reduce tax, but filing in the UK is still mandatory.

Islamic Mortgages for Expats

Q: Are there alternatives like Islamic mortgages for expats?
A:
Yes, available to anyone (not just faith-based customers).
Work on profit-sharing rather than interest.
Key benefit: No early repayment charges – allows easy switching from buy-to-let to residential if moving back to the UK.

Role of Brokers in Expat Mortgages

Q: How can brokers help expats?
A:
Not all banks deal with expat mortgages.
Brokers simplify the process by:
Matching clients with suitable lenders.
Handling complex paperwork, translations, and certifications.
Using industry contacts (e.g., business development managers) to find tailored solutions.

Application Timeline

Q: Does it take longer to process expat mortgages?
A:
Yes, due to additional checks and weaker/older UK credit histories.
Foreign income verification also slows the process.

Q: How early should expats apply for a remortgage?
A:
Ideally, 4 months in advance to allow for extra paperwork and checks.

Closing Reminder

Expat mortgages are complex and vary by individual circumstances.
Always seek advice from a qualified mortgage broker or advisor.
Remember: A mortgage is secured against your home or property. It may be repossessed if you do not keep up repayments.