Foreign national mortgages: Getting a mortgage in the UK

Foreigners, resident or not, can legally apply for a mortgage, but you may need to take extra steps depending on where you are from.

You can apply for a mortgage in the UK if you’re a foreigner, but it can be time-consuming to get it all sorted. Let our guide to foreign national mortgages help you through the key steps.

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Getting a mortgage as a foreigner is possible, but one problem you may experience is the comparatively small number of lenders offering them. Few high street banks do for example, meaning you are often relying on specialist lenders and smaller building societies.

It also tends to be slightly more expensive in terms of interest rates than getting a mortgage if you live in the UK. You will also have to produce a sizeable deposit – usually around 25% of the property’s value.

Where you live can be a problem too, as most lenders will have a list of “acceptable” countries they are happy to lend to residents of. If your home country isn’t on this list then you may run into trouble.

Tougher identity checks will also be in place as lenders will want a clear idea that you are who you say you are. In this case, some lenders may want to meet you in person, which would mean a trip to Britain to secure the loan. However, some are known to dispatch a representative to your country of residence – particularly for high-net-worth clients.

If you’re an EU citizen you will be treated the same as a British citizen but, if not, there will be extra criteria you need to meet. Here’s what you need to know to make a successful mortgage application.

Mortgages for EU citizens

Lenders generally treat all citizens of countries in the European Economic Area (EEA), which includes the 27 countries in the European Union and Iceland, Norway and Liechtenstein, the same as British citizens for mortgages purposes.

Although Switzerland isn’t in the EU or EEA, the same usually applies to its citizens.

At the moment there’s no indication this will change as a result of Brexit but there could be developments in future.

As with anyone applying for a mortgage, the lender will want to see that you have a good credit history in the UK, which is one potential stumbling block if you’re from elsewhere.

“You should have a credit record of at least 12 months to have a chance of being accepted but the longer the better – ideally three years,” says David Hollingworth from mortgage broker London & Country Mortgages.

Any type of credit you have, including an overdraft facility, credit card, loan and mobile phone contract, will be recorded on your credit reports so it’s a good idea to take out and use some of these and make payments on time to show yourself to lenders in the best light.

Registering to vote, if you’re eligible, and having a UK bank account from which you have direct debits set up will also help.

Mortgages for non-EU citizens

If you’re not a citizen of an EEA country or Switzerland there will be more hoops you have to jump through.

If your passport shows you have indefinite leave to remain in the UK, most lenders will consider you. If not, things get more complex and whether you’ll be considered depends on what type of visa you have.

Halifax, for example, requires applicants to have a work permit or visa with at least two years and six months left or to have lived and worked in the UK for more than three years (excluding periods as a refugee or student). If neither of these applies and the work permit has less than two years and six months to go, the lender insists that an employer has to confirm the applicant has asked for, or wants, the permit to be renewed. Applicants also have to submit any documents about conditions attached to their visa. When applicants can’t meet the conditions, they’re likely to be rejected or offered a lower amount such as no more than 75% of the property’s value (known as loan-to-value or LTV).

Nationwide considers applicants that have certain types of visa: a Tier 1 or Tier 2 work visa (for highly qualified and skilled workers) or a UK residence card (showing permanent residency status), family or spouse visa, or UK ancestry visa. This has also applied to joint applications where only one of the applicants is from outside the EEA. Applicants are also limited to 75% LTV unless it’s a joint application where one of the applicants is from outside the EEA and that person’s income hasn’t been included on the application. In most cases, though, applicants should include both incomes to maximise the amount that can be borrowed.

Santander specifies the property must be for your own use and for you to live in immediately. If borrowing more than 75% LTV applicants must have indefinite rights to live and work in the UK. They must have been living in the UK and eligible to work for at least 12 months.

Mortgages for self-employed foreign nationals

The criteria for proving your income so the lender can make sure the mortgage is affordable for you are the same whether you’re a foreign national or not, including if you’re self-employed.

“As with UK nationals, the lender will want to see at least two years of accounts, so you will find it harder to get a mortgage if you have become self-employed more recently,” Hollingworth says.

Can you get a mortgage with leave to remain?

The simple answer is that if you are an EEA or Swiss citizen its easier than not being one. Being an EEA or Swiss citizen, or you have indefinite leave to remain in the UK, getting a mortgage should be straightforward with most lenders willing to consider you.

If you’re not an EEA citizen and don’t have indefinite leave to remain it’s more complicated. A mortgage broker can help you navigate the different criteria set by different lenders to increase your chances of making a successful mortgage application.

Can you get a mortgage on a Tier 2 visa?

The basic answer to that question is yes: your Tier 2 status will not in itself prevent you from being able to get a mortgage. However, different lenders will take different criteria into account when considering your mortgage application.

In addition to the normal affordability and credit assessments that lenders apply to all applications, they will also take the following into account:

  • How long you have been resident in the UK.
  • How long you have left on your Tier 2 visa.
  • Proof of having been a resident in the UK for at least two years – although some may look for three years’ UK residency.
  • Some lenders may also expect Tier 2 mortgage applicants to have a UK-held bank account and/or savings.
  • It’s common for lenders to expect a minimum length of time remaining before your Tier 2 visa expires – typically six months or one year.
  • Lenders may also take into account whether you are expecting to allow your visa to expire, or if it is likely to be renewed as a matter of course.

Getting a joint mortgage with a non-UK citizen

It is possible to secure a joint mortgage when one borrower is a UK national and the other is a non-UK citizen, although the number of lenders offering this type of product will be limited.

Criteria such as employment status, income, credit score, deposit amount and what UK residency level or type of visa the foreign national has will all have an impact on the application process and what mortgage is ultimately available. 

In this scenario, it might be helpful to use a mortgage broker to assist with the search process based on your particular circumstances.

What documentation is needed?

The exact paperwork you’ll need will depend on the bank you use. However, you can expect to be asked for the following:

  • Copies of your personal identification documents.
  • Documents proving you’re creditworthy (credit check, bank statements, proof of wages, P60 and benefits statement).
  • Documents to prove the affordability of the mortgage (household cash flow statements, utility bills or bank statements).

All of these documents should be provided to the bank to get a mortgage in principle, which means a lender has agreed how much they will offer you if you find a suitable property.

Once you have an offer accepted on a home, you’ll have to hand over more paperwork, such as a property valuation and a survey to prove it’s priced fairly.

Do foreigners pay stamp duty?

In April 2021, different rates of stamp duty came into effect for buyers of residential property in England and Northern Ireland who are not resident in the UK. These new rates are 2 percentage points higher than the stamp duty rates that apply to purchases made by UK residents.

You are classed as non-resident if you have spent fewer than 183 days in the UK in the year leading up to buying a property.

This new surcharge does not apply to purchases of land or buildings in Scotland or Wales, where non-resident buyers pay the same stamp duty rates as people living in the UK.

Bottom line

It’s entirely possible to get a mortgage in the UK if you’re not from here. You may be subject to thorough background checks and slightly higher interest rates and deposits, particularly if you’re from outside the EU, but the process is doable.

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