Mortgage in the United Kingdom
A UK mortgage scheme is a possibility for anyone. UK citizens, permanent and temporary residents, those going through immigration, those with an indefinite leave to remain, and non-UK citizens.
General Information
Whether certain banks accept/deny a UK mortgage as well as the loan amount itself [UK mortgage rate] depends on credit history, UK residency status and investment purpose:
- Purchasing property to live in the United Kingdom
- Purchasing property for letting [buy to let mortgage]
- Investment in property
UK mortgage for foreigners for commercial properties are not typically financed through UK mortgage schemes. They are usually cash-only situations or have alternative loan options. UK mortgage for foreigners is usually exclusive to residential properties.
UK mortgage for living
Residential UK mortgage for the purpose of habitation depend on location, bank, and an individual’s savings.
Permanent residents or have an indefinite leave to stay:
- Have lived in the UK for at least 2 years
- Maintain a good credit score in the UK
- Employment in the UK
- UK bank account
Generally, a UK mortgage needs at least 25% of the total amount as down payment
Temporary residents & non UK citizens
- Have lived in the UK at least 2 years
- Are planning to live in the UK
- Secured employment for the future in the UK
- Maintain a good credit score in the UK
- UK bank account
- At least 25% of the total amount as down payment
Mortgage in the UK for foreigners requires either: Tier 2 work visa, family visa, ancestry visa or residency card
Immigration process:
- Must have acquired your indefinite leave to stay
- Or a residency card
- Maintain a good credit score in the UK
- UK bank account
Generally, a UK mortgage needs at least 25% of the total amount as down payment
UK homeowners may be eligible for housing benefits. This relates to UK’s system for Universal Credit that may aid payments under certain conditions. For any UK property investment check if you need a mining report.
UK property investment for letting [Buy to let mortgage]
Buy to let mortgage differs from residential loans with bigger deposits, higher fees, and high interest rates. Buy to let mortgage is typically interest-only which means that the debt will only be cleared at the end of the agreed upon term. Landlords usually expect the monthly mortgage payments to be covered by the rent from tenants.
Buy to let mortgage is available for all residence statuses. Mortgage in the UK for foreigners, including British expats living abroad, would need to find the right bank that performs overseas loans. Such loans are typically most expensive with the highest fees.
Landlords are obliged to notify the tenants if the property is under a UK mortgage scheme.
UK Property Investment
Residential properties as an investment are available for all residential UK status. Overseas UK property investment is performed, however generally a mortgage in the UK for foreigners, under such conditions, is more expensive with higher fees. Many banks are wary of foreign investors. Overseas UK property investment is generally cash-only transactions, with the exception of commercial properties which are cash-only.
UK Mortgage Calculator
UK mortgage calculators are not available on the official UK government website. However, banks generally include a UK mortgage calculator on their official websites. Each UK mortgage calculator differs from bank to bank.
Permanent Residents, immigrants & indefinite leave to stay holders
Homeowners facing difficulties with payments for UK mortgage can seek support from:
