Getting a Mortgage as an Expat Returning to the UK

In this Guide, you’ll find all you need to know about getting a UK mortgage while living overseas. Including what lenders look for and how to improve your chances of being accepted.

Can I get a UK mortgage if I’m an overseas expat?

Yes, it’s definitely possible to get a mortgage as an expat. Expat mortgages are mortgages for former UK residents who want to buy a property in the UK, but either don’t live here anymore, or have recently moved back to the UK.

It makes sense to buy a UK home if you’re thinking of moving back, as a safety net or an investment opportunity if you want to buy-to-let.

If you’re an expat looking for a mortgage in the UK, it can be more difficult than if you’re a current UK resident. That’s because UK mortgage lenders like to see a solid UK credit history and financial ties to the UK. If you don’t have any up-to-date records that show this, you may need to use a specialist mortgage lender. They’ll consider your application on a case-by-case basis.

Lending criteria for expats differs between lenders, but a lot of the big banks prefer more straightforward applications. This makes things difficult if you’re an expat. Factors such as where you currently live, your financial situation and the type of property you want to buy will all need to be analysed. 

How can I get a mortgage as an expat returning to the UK?

Lots of expats look for mortgages when they return to the UK. Despite being a common occurrence, it can be difficult to get a mortgage. This is mainly due to the fact that you’re unlikely to have a fixed UK address or an up-to-date UK credit file. 

When returning to the UK and seeking a mortgage, there are a few things you can do to improve your chances of getting accepted.

Keep a UK address

If possible, you should keep a UK address for correspondence. This could be a family member or close friend’s home. Keeping a correspondence address can make a big difference when it comes to getting your mortgage approved. You should only use the address of someone you really trust, as all your post and private documents will be going to them. 

Having an UK address will also give you a wider choice of lenders, as many will want to see a stable UK address for the last three years. It’s not game over if you can’t get a UK address though, you’ll just have to look around for a good deal. 

Have at least a 25% deposit

Lenders will usually ask expats for a deposit of at least 25%. This is because it lowers their risk and shows a bigger commitment. The more you’re able to put down up front, the better, especially if you’ve been overseas for a long time. Having a sizeable deposit will lower your loan-to-value ratio (LTV), and give you access to the best mortgage rates.

Maintain a UK credit file

Unfortunately, credit scores can’t be transferred from one country to another. Even if your credit score was excellent when you were living elsewhere, this doesn’t mean you now have a good credit score in the UK You'll need to build up your credit in the UK again, so you can have a credit score. 

It’s a good idea to keep some UK accounts open while you’re abroad to maintain a UK credit history. You should also try to keep this credit file as clean as possible while you’re abroad. When assessing your application, mortgage lenders will check your credit, and if there’s nothing there then you could end up being refused.

As well as keeping a UK bank account open, you can maintain your UK credit history by using an international credit card - just make sure the bank knows you’re abroad, otherwise it could be flagged by their fraud team.

Make sure your employment is secure

If possible, try to secure some employment for when you return to the UK. It’ll show lenders that you’ll have regular income and can help speed up your application. 

Mortgage application assessments differ between lenders. Some will want to see six months of employment history, while others will be satisfied with proof of a job offer (with start dates and salary details). 

If you’re self-employed, things will be a bit trickier. A lot of high street banks will ask for 12 months of UK trading history, which you’re not likely to have. It's best to get independent financial advice in this case.

What do lenders look for in expat mortgage applications?

When deciding how much you can borrow, mortgage lenders need to look at your credit file to see how you've managed your money in the past. Because of this, they'll want to see your UK credit history. 

If you’re self-employed, you should look for  an internationally-recognised accountant who can put together your latest accounts. If you’re employed full-time, it'll be easier to get a mortgage if you work for a globally-recognised company. Some lenders might also ask to see income paid into a UK bank account.

Most lenders will ask you to put down a deposit of at least 25% if you're an expat, but some may accept a smaller amount. The more you're able to put down upfront, the easier it'll be to get a mortgage, and the better the interest rates will be. 

You'll need to bear in mind that there are stricter requirements for where you get your deposit - this is due to international anti-money laundering law. You'll need to be able to prove where your deposit has come from. The following sources will be acceptable: 

• Your own savings or investments

• The sale of another property

• Equity released from another property

• Inheritance money

• A gifted deposit

If you have other aspects such as a history of bad credit, it could be tricky to get accepted for a mortgage, but not impossible. Being an expat with bad credit history can make for a complex application, but if you meet the lending criteria set out by specialist lenders, you should be able to get approved.

Building a credit score once back in the UK

It’s easier to build up a credit history from scratch than it is to repair a bad credit score. Here’s a list of things you can do to build up your credit file when you get back to the UK:

Register to vote

The easiest and quickest thing you can do to start rebuilding your credit history is registering on the electoral roll. Make sure you’re registered to vote at your new UK address, and that all your personal information is correct. 

Put your name on a utility bill

Paying bills on time will help to establish your credit score. You can take out an energy bill, internet, water bill or even a mobile phone contract. As long as these bills are paid on time, then you can build a good credit history.