Securing a mortgage for overseas property from the UK can be challenging, but it is achievable. If your plan is to purchase a holiday home or retire abroad, speaking with a broker who understands international mortgages and cross-border property is strongly advised for this specialist purchase.
Your chosen country can determine whether a mortgage should be arranged with a UK lender, an international provider, or a local lender in the property’s destination. You can read more about purchasing overseas in our guide, or speak to us now. An experienced adviser can work to keep the process clear, straightforward and as stress-free as possible.
Can you get a mortgage to buy an overseas property?
You can sometimes get a UK mortgage to buy overseas property, but it will depend where you plan to buy, what you plan to use it for, and, of course, your individual circumstances. Buying a home to retire abroad is likely to be easier than purchasing buy-to-let property, both in terms of getting a mortgage, and local customs. Some countries prefer foreign buyers to relocate if they are purchasing property, rather than buying as a UK-based landlord.
In some cases you may need an international lender, or even a local bank in certain countries. Whichever route you take into overseas property purchase, however, it’s likely to be less straightforward than buying in the UK. Be mindful of local regulations, taxes and licenses in both the destination country, and the UK if you apply for a mortgage here.
What your options would be
Here are some routes to consider when purchasing abroad. The options available will depend on the country and whether you plan to live in the property:
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Getting a mortgage with a UK bank: A limited number of UK lenders offer overseas mortgages, usually only for countries where they already operate through local branches.
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Getting an overseas mortgage in the country you plan to buy in: If you arrange this from the UK, you’ll need a specialist overseas broker. Rates can be lower in some markets, but movements in the exchange rate can change your repayments. If you borrow outside the UK, your loan will not be regulated by the Financial Conduct Authority (FCA).
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Remortgaging your UK home to purchase the overseas property outright: In some countries, prices are significantly lower, so—if you hold substantial equity—it may be possible to purchase outright by remortgaging your current home.
Lending criteria for overseas mortgages
Mortgages on overseas properties usually come with tighter criteria than mortgages on UK property, as lenders view an overseas purchase as higher risk. To qualify for a UK mortgage on an overseas property, you’ll likely need to meet requirements such as:
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Higher deposit requirements: A larger deposit is often needed—typically 15–50%—with the exact percentage varying by destination.
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Capped Loan to income (LTI) ratio: Lending may be limited to 4–4.5 times your income, whereas up to 6 times can be available on UK properties.
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Property usage/type limitations: Some countries restrict purchases unless you intend to live in the property. Lenders may also impose rules on acceptable property use and property types abroad, and mortgages for non-standard properties can be harder to secure.
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Country limitations: If you borrow from a UK lender, most will only lend in countries where they have branches, and may exclude locations with higher political or economic risk.
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Income related requirements: Some lenders offer overseas mortgages only to applicants in permanent employment, and in some cases restrict this type of purchase to high net worth individuals.
Noteworthy - If you opt for a mortgage with an overseas lender, many of them have a non-refundable deposit
How to get an overseas mortgage
How you arrange a mortgage for overseas property will differ depending on whether you borrow in the UK or abroad. In all cases, seeking advice from an experienced broker is strongly recommended.
Many lenders that provide overseas mortgages—especially international lenders—do not work directly with the public. A mortgage broker with specific experience in this niche can help you access the right lender and, where needed, introduce a suitable estate agent and solicitor.
As with any mortgage application, get your finances in good order before you apply, and make sure you have researched the area and the property you plan to purchase.
Available mortgage lenders
Several UK banks offer overseas mortgages—examples include HSBC, Santander and NatWest. Lenders with international banking services are usually the most likely to support an overseas purchase.
If a UK lender is not suitable, you may still be able to take a loan from a bank in the country where you plan to buy. Do note, meeting their lending criteria can be harder if you do not yet have local credit history or employment records.
Are the rates higher for overseas mortgages?
Overseas property mortgages from UK lenders are usually pricier than mortgages on UK properties, reflecting the higher risk. Some borrowers choose a mortgage with an international lender to seek lower interest rates. However, you should factor in exchange rate movements, as they can affect both the final purchase price and your monthly repayments.
Frequently Asked Questions
As with other bad credit mortgages, your chances will depend on the type, age and severity of any credit issues. An adverse credit history can make obtaining an overseas mortgage more difficult, but it is not always impossible.
Working with an experienced broker—such as the specialists we partner with—will give you the best chance of finding a suitable overseas mortgage for your circumstances.