Expat Remortgage

Can I renew my UK mortgage if I’m an expat and live abroad?

Sarah: Yes, you can. To touch on what Shelley mentioned there, it’s worth highlighting that not all lenders will do a product transfer. I would remind people, as always, to give it plenty of time.

Make sure you speak to an advisor ideally three to six months before your rate expires. We’ll then have a nice amount of time to find the right home for that remortgage. Don’t make the assumption that your lender will just do a product transfer. If you are now living abroad, give us time to look into it and make life easier for you.

Shelley: Even though sometimes a product transfer is the answer, it’s not always obvious at the beginning – even to us as advisors. We have to really interrogate the situation to make sure people understand their options, and that they’re getting the best outcome.

I’d always advocate speaking to a broker, because it’s a complicated area. It’s better to be fully informed and know what your choices are.

Sarah: It could cost you more money if you don’t get the right advice.

Which lenders offer expat remortgages in the UK? Which lenders will consider an application? Are there many?

Shelley: There are a decent number of lenders that will, and a significant amount that won’t. Each lender will have their own criteria. On the residential side, some lenders want the expat to be physically in the country when they’re signing up to the mortgage – or to have lived in the country permanently for a period before they will even consider it.

If we’re using foreign income, lenders often take a ‘haircut’ on that. They won’t use it at today’s exchange rate. They apply a haircut of 20%, reducing the total before they assess your affordability. Those haircuts can be quite different from bank to bank, and the criteria is variable too, so we have to work through it in detail to find the right lender.

There are some big high street names in there. HSBC can be good on the residential side and we’ve got specialist lenders like WestOne, for example and Family Building Society in the Buy to Let space. I could name several more, but I always prefer to give a bespoke and personalised recommendation.

What are the lending criteria for expat remortgages?

Sarah: That income haircut is why you need an advisor – it’s impossible to navigate that yourself to work out what income a lender will take on board and how they differ. The lending criteria will always depend on your specific circumstances.

The job of an advisor is a bit like solving a puzzle – we have to put all the pieces together to work out the solution. Right now it’s still a very manual process and built on relationships we have with lenders and our knowledge, as well as the systems we use.

We need to look at where you’re living, how much you’re earning and what that haircut needs to be to make it affordable – and whether it’s residential or Buy to Let. There can be different variations in how you get your income and whether you get a bonus.

We look at any debt in the background, your credit history and credit rating. We have to explore all the different variants – there’s rarely a ‘normal’ transaction. There’s always something we need to look into to get you the best advice.

Shelley: Even the country you’re living in can influence whether a lender is happy to accept you. Some countries are deemed to be higher risk than others, and some are tricky to work with – that’s certainly a factor that comes up.

If you have lived in your property before and now it’s a rental, there are different criteria again. We have to apply rental stress tests and make sure you meet the lender’s threshold for that.

How do I apply for a remortgage as an expat?

Sarah: Make sure you work with an advisor that you trust, and can work around the hours you’ve got available. Of course, there are different time zones and different ways to communicate. Finding the right advisor to work with you in the right way is critical.

Shelley: It’s also key to work with somebody who understands this area, as there are quirks to it and different panels of lenders.There are lots of advisors out there, but make sure you work with somebody who’s done expat cases before, so they know what they’re doing.

What else do we need to know about expat remortgages?

Shelley: I’d just like to talk about my passion for this space. We all work from home at the Mortgage Mum and I love that this gives me a window into other people’s lives. I’ve had one client who used to regularly video call me while driving around Dubai. I’ve had calls from a balcony in Switzerland with a view of the village clock tower…

It’s a nice space where we can truly build relationships. It gives us a view of the bigger world out there. So if anybody in this situation wants to work with someone who is genuinely interested in them, please come along.

People are coming to me with an idea about what they should be doing, what they’ve been told, what they’ve researched. And it’s never quite the same as my advice.

We strip it back. What are your goals here? Why are we talking about doing this? I would propose an option – how does that sit? It’s always different – and this is a good space to get advice in, because there are a lot of myths out there.

We can be creative with mortgages in a completely transparent, compliant way to meet your needs. That’s what we’re really passionate about.

Sarah: Thank you so much, Shelley. Shelley’s the managing director of our specialist finance company and her passion is huge. She knows so much – not just expats and the specialist area, but also the normal mortgage market. She’s a true fountain of mortgage knowledge.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.

YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.

THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.