Expatriate Remortgages

If you’re a UK national living abroad and own a property back home, an expat remortgage can help you release equity or cut your costs by refinancing to a cheaper deal.

In this article, you will find out all you need to know about getting an expat remortgage, as well as how a broker can help you find the right lender.

Can you remortgage a UK property if you’re an expat?

Yes, it’s possible for either residential or buy-to-let (BTL) properties. You can get a remortgage on either a repayment or interest-only basis, though some lenders may only offer one or the other. Usually, BTL expat remortgages are interest-only.

Expat remortgages on UK properties are generally easier to arrange than a brand new mortgage, as you will likely have a recent credit rating thanks to your regular repayments.

But if for whatever reason you don’t have an up-to-date credit profile, it may be harder to refinance your property. As a result you may need specialist advice to help you find the right lender.

Why might you need to remortgage?

As an expat living and working abroad, you may still own property in the UK. This may be a residential property for you and your family or to rent out and generate additional income.

If your fixed-rate mortgage deal is coming to an end, remortgaging onto a new deal could save you money compared to staying on your lender’s standard variable rate (which is usually more expensive).

Remortgaging could also allow you to release equity from your property that you can use to buy a property where you’re currently living, reinvest into a new BTL property in the UK, give cash to a family member or simply fund your day-to-day living expenses.

Can you get an expat remortgage on a property outside the UK?

If you’re living outside the UK and looking to refinance a property abroad, an overseas mortgage, using a local lender, may be more appropriate than an expat remortgage deal, which are designed for properties within the UK.

How a broker can help you

Expat remortgages are a specialised area of finance and several high street banks, including the likes of Santander and TSB, do not offer them.

Even the lenders that do offer them have strict criteria and may not accept applications from expats living in specific countries or who are paid in certain foreign currencies. Applying to the wrong lender can lead to rejections, staining your credit history.

However, the mortgage brokers we work with have access to the whole market and will be able to find you a lender that is more likely to accept an application with your specific circumstances. Also, if your situation is unusual in any way, such as having multiple income streams, a broker can explain this to lenders.

While you could go directly to a lender who offers expat remortgages, bear in mind that if your country of residence is in a time zone that is significantly different to the UK, you might have difficulty communicating with lenders. As a result, it could take you much longer to complete your remortgage. In contrast, a UK-based broker can represent you during a lender’s working hours and help you remortgage more quickly.

To receive bespoke advice on your expat remortgage, get in touch with us today and we can set up a free initial consultation with no obligation to proceed.

Eligibility Criteria

This will vary from lender to lender, but there are a few common checks that expat borrowers should be aware of. Preparing for these requirements in advance will help with your remortgage application.

Affordability

All mortgage borrowers are subject to affordability checks by lenders when applying for finance. However, expats will generally have to pass tougher checks which take into consideration the additional costs of living overseas, as well as exchange rate fluctuations, to calculate whether you can afford to make repayments.

In general, you should anticipate affordability checks to include:

• Bank statements and proof of income such as payslips, which will need to be written or translated into English.
• A minimum income equivalent to £25,000 (though some BTL expat mortgage lenders have no minimum income requirement).
• Some lenders will only accept your application if you are employed by a large “internationally recognised” company, because of the difficulty of verifying your employment with a small business in a foreign country.

What if your income is in a foreign currency?

It can be harder to get a remortgage if you are paid in a foreign currency, because lenders see this as a higher risk as exchange rate fluctuations could reduce the value of your income. As such, some lenders including Halifax and Barclays do not accept applications with a foreign currency income.

Other lenders will only accept certain foreign currencies: for example, the Progressive Building Society will only accept euro and US dollar applications.

If your income is paid in multiple foreign currencies, this can also be an issue. Lenders such as Suffolk Building Society will only accept one currency in an application.

Being paid in a foreign currency can make it harder to pass affordability checks, as lenders will convert your income into pounds and discount it by as much as 20-30% to test if you can afford repayments. Lenders such as Natwest will alert you if exchange rates change 20% or more from where they were when the mortgage was completed.

What if you are self-employed?

You can still get an expat remortgage, but lenders’ criteria will be very strict. You will likely need to show at least three years of accounts, plus a reference from an accountant with an internationally recognised qualification.

Country of residence

No lender will accept a remortgage application from expats in every country around the world. For instance, the Family Building Society’s list of accepted countries does not include Brazil, Mexico or Thailand. Similarly, several lenders will not consider expats living in Australia.

If you apply to a lender that does not accept applications from your country of residence, you are likely to be rejected, which could leave a black mark on your credit history. A broker can prove invaluable here, as they will be able to identify lenders who definitely can help.

Do you have a UK bank account?

Most expat mortgage lenders will expect repayments to be made from a UK account using pound sterling, even if your income is in a foreign currency.

In the case of BTL remortgages, most lenders will require the tenant’s rent to be paid into a UK account, which will be the same one that is set up to pay the mortgage repayments.

If you need help choosing and setting up a UK bank account, your broker will be able to guide you in the right direction.

Loan-to-value (LTV)

Most expat lenders expect to see at least 20% equity/LTV for a remortgage, though some may expect 40%. Remember that a higher LTV does come with benefits, such as giving you access to lower interest rates and, therefore, cheaper repayments.

Any other criteria?

As well as proof of ID such as a passport and proof of address, you may be asked to show proof of an ID card or visa for your country of residence. Some lenders may ask your employer to provide proof of your address as well.

What if you are self-employed?

You can still get an expat remortgage, but lenders’ criteria will be very strict. You will likely need to show at least three years of accounts, plus a reference from an accountant with an internationally recognised qualification.

Speak to an expat remortgage advisor today

Whether you need to remortgage a residential or BTL property, speaking to a mortgage advisor can help you get the best deal and avoid any rejections.

To find a broker that is right for you, using our advisor-matching service we can quickly assess your needs and circumstances and pair you with an expat remortgage broker who has the exact knowledge and expertise you need.

For an obligation-free initial consultation, call 0808 189 0463 or make an enquiry online today.