Simmonds Mortgages Services, specialist brokers in foreign income mortgages
Although it’s possible to get a UK mortgage if your income earned is in a foreign currency, there may be challenges. Although some UK lenders accept foreign income from mortgage applicants, it can be harder to find the right product if you want to buy UK property using foreign income.
What is a foreign income mortgage?
A foreign income mortgage is for borrowers who wish to buy property in the UK using income earned outside of the UK. Many lenders do not accept overseas income as they view this as more risky due to currency fluctuations.
However, some lenders will offer a UK mortgage based on overseas income, but the lending criteria will often adjust for currency exchange rate fluctuations, so you may only be able to use perhaps 80% of your annual income when working out how much you can borrow.
How do foreign income mortgages work in the UK?
Foreign income mortgages, available from specialist lenders, will take your annual income from overseas and apply the prevailing exchange rate to work out your equivalent income in sterling when making lending decisions.
What foreign income sources are accepted by UK mortgage lenders?
Acceptable deposit sources for most lenders include cash, savings accounts, stocks, shares and bonds, but the most common source is equity in another property. Foreign income includes overseas income from employment, investments, property rental income or pensions held overseas.
What is the application process?
To apply for a UK mortgage with foreign-earned income, you will need to meet certain eligibility criteria. As it can be harder to find the right product and UK mortgage lender, using a mortgage broker can be beneficial.
You will need to provide the correct documentation which may need to be translated from a foreign language into English. You’ll need to supply evidence of your employment status, payslips, tax returns, overseas bank statements or annual accounts if you are self-employed. All this can take longer to gather if you are waiting on overseas banks or employers to provide information, so the mortgage application process may be slower. A joint mortgage would be treated in the same way.
Some mortgage lenders require you to have a UK bank account where you can manage your mortgage payments in sterling. Lenders will want to see that the UK tax paid is correct and the lender’s criteria in general is met.
Frequently asked questions about foreign income mortgages
What is the difference between foreign currency mortgages, foreign nationals mortgages and foreign income mortgages?
A foreign currency UK mortgage is one where the loan amount is in an overseas currency whereas foreign income mortgages are loaned in UK sterling. Typically, lenders provide foreign currency mortgages for UK nationals to buy property overseas.
Foreign income mortgages are typically used by UK citizens whose income is predominantly in currencies other than UK sterling to buy property in the UK. Foreign national mortgages are for non-UK citizens who want to buy property in the UK and have the appropriate visa.
Can expats get a UK mortgage with foreign income?
Yes, expats can get UK mortgages using foreign-earned income. International income can be used by UK citizens living in the UK or abroad for a property purchase.
Do currency fluctuations matter?
Yes, currency exchange rates can make a big difference to your mortgage offer. Most UK lenders do not offer mortgages on overseas income but those who do view these products as higher risk and consequently arrangement fees and interest rates tend to be higher.
We can find the right mortgage for you. Get in touch with us today
As an independent broker, Simmonds Mortgage Services can access most mortgage lenders in the UK market to help you find an appropriate foreign-currency mortgage. Your personal circumstances, credit history and financial position may make it harder to get a mortgage approval, especially if you have no recent UK-based credit history. In these situations, using the right mortgage broker can help you find an affordable mortgage product and navigate the mortgage process.