What mortgage type do you need as an Expat?

If you are looking to buy a property with an expat residential mortgage, you or a member of your family must live in it – either now or in the near future. Essentially, it’s a home.

However, as a foreign national, a UK residential mortgage isn’t straightforward. Residential mortgages are regulated by the Financial Conduct Authority (FCA) so lenders who want to provide mortgages to overseas customers have stricter criteria. And what this translates to is fewer options. As a result, many non-UK buyers tend to use buy-to-let mortgages to buy their property.

The buy-to-let product offers buyers greater flexibility as the property owner can rent the property to a tenant or a family member as well as live in it themselves. Overseas buyers in territories such as Hong Kong, Singapore, and the USA have continued to make buy-to-let mortgages the preferred product choice.

Buying a UK property with a buy-to-let mortgage is a great option for non-UK expats. While you live and work elsewhere, you can get another stream of revenue from renting your property to a tenant in the UK. In the future, you can sell this property as part of a retirement fund or you could even move into it.

If your child wants to study in the UK, owning a property is a great opportunity for them to have a UK base. A UK property can also serve as a great starting point for a larger investment portfolio. In short, a buy-to-let mortgage offers breadth of choice and it facilitates adaptation to changing circumstances.

Buy-to-let mortgages are also more flexible than residential mortgages. For example, you can move into a home bought on a buy-to-let mortgage. However, you cannot rent out a home bought on a residential mortgage without getting permission from your mortgage provider and switching your mortgage to a buy-to-let which, in some cases, can be expensive and not always guaranteed by your current lender.

Help required?

If you would like to review your current mortgage deal please do make contact and one of our advisers will be happy to assist.