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Expat mortgages

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 01. May 2024

Interested in speaking to mortgage brokers about expat mortgages. 

  • What are enquiry levels like currently? Is this a growing area of the market? 
  • What is the lender landscape like? is it an area lenders are entering? 
  • What would you like to see from lenders in terms of criteria/rate etc? 
  • What should expat borrowers keep in mind? 

3 responses from the Newspage community

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Editor
Aaron Strutt
Product and Communications Director at Trinity Financial
We still get a lot of expats calling us to arrange mortgages. These enquires tend to be interesting because they are from people living countries on the other side of the world. They often have unusual and highly paid jobs where they do not need to pay taxes. This means they usually have decent deposits.
There are many lenders offering expat mortgages, but they tend to be smaller and more niche providers. They often charge higher rates with larger set-up fees, and many expats do not understand why. They do not want to pay more money just because they live overseas. While the lenders like the extra margin they can charge, many borrowers are not so keen. That said, they want to buy somewhere to live when they come back to the UK.
Some of the niche and specialist lenders offering expat mortgages require borrowers to have a minimum income of say £30,000 and they will not lend to people working in a country that is sanctioned or deemed high risk.
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Steven Morris
Advising Director at Advantage Financial Solutions
Expat mortgage enquiries are certainly on the rise, in no small part due to lenders exiling consent to let borrowers on to now incredibly expensive SVR's. The same old names tend to dominate this part of the market (smaller building societies, Channel island lenders), but some newer names like Molo and Lendco have grabbed a share in recent years. I think lending criteria is already moving in the right direction. The biggest challenge was making rent fit on BTL due to the high rates, but recent changes by lenders like Suffolk in boosting BTL affordability has helped no end (tax bracket based on UK income alone and lower stress rates). Expat borrowers should make sure they arrange their mortgage with a broker that does them regularly. Logistics such as lenders demanding ID certified by the embassy, UK tax calcs (even when no tax payable), or the dreaded "irrevocable nomination" clause in offers with lenders such as Saffron, can throw a spanner in the works of the inexperienced broker.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
Ex-pat mortgages are something of a regulatory and legal minefield, as the rules around international regulatory remits and the law that applies to a transaction has not been tested in a court. So, if a broker in London is advising a client in Dubai, about a purchase in Birmingham; does the adviser simply have to comply with UK regulations and law, or is there a possibility that they could need to comply with Dubai rules too, as that's where the client receiving the advice is located? Even if a legal precident is set in Dubai that would mean this scenario is OK, that wouldn't reasolve the issue of the client was then based in Sydney, as we'd then need to know what the Australian legal and regulatory view would be. Currently, it is down to brokers and networks to work with their PI insurers and make a commercial decsion on whether or not it's potential risk is worth taking, or not.