Getting a mortgage as a non UK- National / Foreign passport holder

Introduction

Welcome back to Let’s Talk Money and Mortgages. Today, Gemma is joined by Issachar, trained accountant, mortgage advisor with over 10 years’ experience, and founding director at WIS.
In this episode, we discuss the recent lending rule changes affecting foreign nationals, available alternatives, and practical tips to improve your mortgage chances.

Recent Changes for Foreign Nationals

Q: What recent changes have affected foreign nationals applying for mortgages?
A (Issachar):
One of the big lenders, previously very supportive of foreign nationals, has tightened its rules.
Now, to qualify, you must meet one of the following:
Lived in the UK for five years, or
Have a combined income of £100,000 (for joint applications), or
Provide a minimum 25% deposit.
For many buyers, especially with the £100,000 income requirement, this is a big hurdle.
As a result, some people have dropped out of the market.
Good news: This lender isn’t the only option — other lenders still support foreign nationals.

Alternatives for Foreign Nationals

Q: What alternatives are available if I don’t meet those strict requirements?
A:
Some lenders accept 10% deposit (instead of 25%).
Requirement: Lived in the UK for at least 2 years.
No minimum income needed.
Other lenders may offer flexibility using bespoke underwriting.
If you’ve been in the UK for less than two years (e.g., 1.5 years), you may just need to wait another 6 months.
This waiting period can be useful to build up your credit history.

Importance of Visa Type

Q: How important is visa type in getting a mortgage?
A:
Very important. Example:
Students on visas → very difficult, as they cannot work effectively.
Work visas (Tier 2, highly skilled, investor visas) → more favorable, since applicants can work and earn.
Brexit impact:
Previously, EU nationals were viewed more favorably.
Now, banks need to check right-to-work status.
Spouse situations: If one spouse is a student but the other earns a high salary, banks may still hesitate, as the working spouse is dependent.
Bespoke underwriting may help in these cases, but it requires the support of a specialist advisor.

Credit Scores and Foreign Nationals

Q: Are banks more lenient with credit scores for foreign nationals?
A:
No — banks are stricter.
Foreign nationals are perceived as higher risk, so banks look at credit scores carefully.
Disadvantage:
Locals may have 10+ years of credit history.
Foreign nationals often start from zero.
Difficulty: Banks cannot easily trace foreign addresses.

Tips to Improve Credit Score

Q: What steps can foreign nationals take to improve their credit score?
A:
Voter Registration
Register on the electoral roll via the UK government website.
Helps prove stability and boosts credit score.
Stable Address
Avoid moving frequently.
Banks view frequent address changes as instability.
Direct Debits
Set up direct debits for bills, utilities, and phone contracts.
Shows you reliably honor commitments.
Avoid Loans
Loans affect borrowing capacity and credit scores.
If unavoidable, allow time to rebuild your score afterwards.
Credit Cards
Having one beginner’s credit card is fine.
Always pay in full by direct debit.
Avoid using more than 50% of your limit.
Don’t open multiple cards — banks see this as potential hidden debt.
Bank Statements
Keep them clean.
Avoid overdrafts, especially unauthorized ones.
Limit unusual or excessive spending (e.g., gambling or luxury entertainment).
Key point: Credit score is something you can control, unlike visa length or years in the UK.

Time in the UK

Q: How important is the length of time in the UK?
A:
Very important.
Example: A client lived in the UK for 4 years, left for 1 year, then returned. The “clock” restarted on return.
Generally, 2 years in the UK is needed to build credit history and access mortgages.
Ensure your visa has at least 6 months remaining at application.
Watch for passport expiry too — if it expires in under 6 months, banks may reject the application.

Employment Contracts

Q: Does the type of employment contract matter?
A:
Yes. Banks prefer stability.
Open-ended, permanent contracts are viewed most favorably.
Banks review how salary is structured:
Basic salary → fully counted.
Allowances (travel, living, etc.) → may not be counted by some banks.
Example: A client earning £50,000 with allowances may be assessed as £40,000 income by the bank.
This can affect borrowing power and damage credit score if the application fails.
Best approach: Speak to an advisor before applying, especially if your pay includes allowances.

Closing Advice

Each case is different.
Always seek advice before applying, to avoid damaging your credit score with failed applications.
Mortgage advisors understand lender criteria and can help navigate complex cases.
Disclaimer: A mortgage is secured against your home or property. It may be repossessed if you do not keep up repayments.