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Expat mortgages in the UK – what are the different types?

Written by Suffolk Building Society

4 Jan 2024



6 min read

If you’re a UK national who lives or works abroad and you need a mortgage for property in the UK, you’ll need to apply for an expat mortgage. There are various types of expat mortgages available. They differ from standard mortgages because they are geared towards people who are paid in a foreign currency. They also take into account that people working abroad may have their deposit saved in an overseas currency.

There are three main types of expat mortgages in the UK. Read on to learn more about which option might be most appropriate for your circumstances.

1. UK expat residential mortgages

In general, an expat residential mortgage is similar to a standard UK residential mortgage. However, an expat mortgage is better designed to deal with the complexities of living overseas. For example, the distance, currency, location, overseas employment, etc.

This type of mortgage is suitable for UK expats whose immediate family is staying in the UK or for those who are taking their family abroad with them. In the latter case, their home will be empty until they return to the UK, either for a temporary visit or to live back in the UK permanently. It’s important to note, that not all mortgage companies allow this. It’s what’s known as ‘lock up and leave’. If this is your intention, you should check the terms and conditions offered by the mortgage lender . You should also check the terms and conditions of your home insurance to ensure your home remains protected.

2. UK expat buy to let

This may be the mortgage type for you if you’re living or working abroad and you want to rent out your UK property.

It may be that you feel that your home will be more secure while you are away if you allow someone else to live there. Or you may want to keep a foothold in the UK property market or generate income to help cover your mortgage payments.

If you buy a property with the sole intention of letting it, your mortgage will be seen as a business transaction. Therefore, it’s not covered by the Financial Conduct Authority’s consumer regulations.

If, however, you have previously lived in the property before moving overseas, this will be classed as a ‘consumer’ expat buy to let mortgage. You will need to check that your lender offers this product. Many do both standard expat buy to let, and ‘consumer’ expat buy to let. It’s helpful to thoroughly explain your circumstances to the lender to make sure that you meet their criteria.

Both types of expat buy to let mortgages are aimed at renting a property out on a long-term basis. So generally, your tenants will be on a contract that lasts at least 6 months. This means you will have a stable rental income and the time and effort to manage the letting is kept to a minimum.

Many UK expats employ the services of a maintenance company via their lettings agent. This helps them deal with any issues such as a broken dishwasher or leaking roof. These can be difficult to manage when they are out of the country and potentially in a different time zone.

3. Expat holiday let

If you think you’ll make short visits back to the UK and would prefer to live in your own home when you do, it’s worth considering an expat holiday let mortgage.

This mortgage permits the homeowner to rent the property out on a short-term basis. It also allows the mortgage holder to live in the property for a set number of days. This is often between 30 and 90 days per year. That’s usually plenty of time for expats to visit and keep in touch with family and friends in the UK.

Take note, some lenders will only consider expat holiday let mortgage applications if the property is in an area with known holiday let demand.

While it can be comforting to return to your own home when you visit, managing multiple short-term lets can be time-consuming. Every time a new tenant arrives, the property will need to be cleaned and prepared for the new guests. Many expat holiday let owners rely on a holiday lettings agency to deal with this handover process.

For all of the above mortgage types, you must be careful not to breach the terms and conditions of your contract. It’s important to keep your mortgage lender up to date with your working and living arrangements. If you took out a mortgage when living and working in the UK, your lender will expect that to remain the case. Ditto for living and working abroad.

If you’re unsure which of these mortgages best suits your needs, discuss your circumstances with a mortgage broker. They will have helped many clients navigate their expat mortgage journeys and will be able to advise you about how best to progress.

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