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UK Mortgages: Everything you need to know

UK Mortgages: Everything you need to know

Since the COVID-19 pandemic, many more lenders in the UK are looking to offer mortgages to not only British expats living abroad – in countries like Spain, for example – but to foreign nationals as well.

This is a complete turnaround from five or six years ago when lenders had a real gripe with non-UK-tax residents who earned income in any currency other than the pound sterling.

So, why are mortgage lenders in the UK now actively seeking out expats and foreign nationals?

In this article, our expert Spanish mortgage consultants, Marc Elliott and Stewart Weeks, reveal everything you need to know if you’re a British expat or foreign national in Spain wanting to invest in property assets in the UK.

Why consider a UK mortgage as a British expat or Spanish national?

There are many reasons why expats or foreign nationals living in Spain may consider securing a UK mortgage.

A British expat family, for example, may choose to purchase a second home in the UK to stay connected to their roots and enjoy summer holidays abroad.

Spanish nationals, on the other hand, may work remotely for a company based in the UK and wish to invest in UK property assets as a long-term financial strategy.

And there are many advantages to doing so, including:

  • Competitive interest rates

We have access to a range of lenders offering market-leading competitive expat rates.

  • Currency stability

Those earning in GBP are at a much lower risk of currency fluctuations affecting their mortgage repayments, which is why many expats and Spanish nationals are looking to secure a UK mortgage.

  • Regulated market

Borrowers in the UK have much greater peace of mind due to the market being so well-regulated with more robust consumer protection practices in place.

  • Product variety

UK lenders offer a much wider variety of mortgage products, allowing borrowers to choose one that best meets their needs and lines up with their financial circumstances.

What are the eligibility criteria?

Both British expats and Spanish nationals need to meet certain criteria if they are to apply for a UK mortgage and will need to provide the following when applying:

Proof of residency

For British expats, this can include past addresses, utility bills, and rental agreements.

However, non-residents who are unable to prove previous occupancy in the UK or strong ties to the country may need to put down a larger deposit – usually around 20-30% of the property price – or repay their mortgage at a much steeper interest rate as a result.

Your full UK credit history

Having a full and positive UK credit history is essential when securing a British mortgage, as it shows lenders your ability to make your repayments.

If you’re a Spanish national, some lenders may take your Spanish credit history into account, but you may also need to improve your UK credit score for a better chance of securing a mortgage deal.

To do this, you can register for the electoral roll, take control of all your existing debts, and open and manage a UK bank account.

Proof of employment and income

Both British expats living in Spain and Spanish nationals will need to provide employment contracts and letters confirming job security and income to secure a UK mortgage.

Providing proof of income will differ slightly, with British expats needing to submit payslips, tax returns, and recent bank statements, while Spanish nationals can submit currency conversion documentation to account for exchange rate fluctuations.

What types of mortgages are available to expats and foreign nationals?

There are a few different types of mortgages available that are ideal for both British expats looking to move back to the UK and Spanish nationals who want to relocate for the first time, including:

  • Fixed-rate mortgages

Fixed-rate mortgages are ideal for expats and nationals who are seeking stability and looking to permanently relocate to the United Kingdom, or at least for an extended period. With predictable monthly repayments, interest rates will remain fixed for anywhere between 2-5 years.

  • Variable rate mortgages

These mortgages are best suited to short-term homeowners, who intend to sell or remortgage their property within a few years or those who don’t mind changes in their monthly repayments based on interest rate fluctuations.

  • Interest-only mortgages

Interest-only deals allow for lower monthly repayments and greater cash flow flexibility.

Your monthly repayments only cover the agreed interest with the loan principle repaid by the end of the mortgage term, which is best suited to high-income borrowers with a solid repayment plan in place and expats or nationals who want to maximise the rental return.

  • Buy-to-let mortgages

These mortgages are intended for those interested in purchasing a rental property, who want to generate rental income, andbenefit from property value appreciation.

These properties usually require a larger deposit and have different assessment criteria.

  • Student Accommodation Rental Properties

If clients that live in Spain have children who are going to university, we can offer mortgages on Student accommodation so Mum and Dad can invest in student-let properties to help pay for university costs.

  • Bridging loans

If short term lending is required, we can arrange bridging finance on UK property assets very easily and cheaply compared to doing the same on Spanish assets

  • RIO mortgages (Retirement Interest Only)

Interest only Mortgages for over 55’s on UK property assets, these mortgages can be used for any purpose and are much easier to do on UK assets rather than Spanish property assets.

  • Holiday Lets

This is the same type of thing as student lets but these mortgages are designed for properties that are to be rented on a short-term holiday let basis.

  • Commercial mortgages

We can arrange mortgage finance on most commercial premises such as shops, warehouses, hotels etc.

Need expert advice?

No matter if you’re a British expat familiar with the process of obtaining a mortgage in the UK or a Spanish national trying to secure a British mortgage for the first time, wrapping your head around everything can be difficult.

If you need further advice or have any questions, you’re more than welcome to reach out to our expert team, here at Fluent Finance Abroad.

Simply give us a call or email us at and we’ll get back to you as soon as we can.

Alternatively, you can check out our YouTube video, where we discuss the intricacies of securing a UK mortgage as a British expat living in Spain or a Spanish national in further detail.

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