Can An Expat Based In Hong Kong Secure A Mortgage In The UK?

Yes, expats based in Hong Kong can secure a UK mortgage, but the process can be more complicated than it is for UK residents. In this article, we’ll discuss what an expat mortgage is, the eligibility criteria, the types of mortgages available, and how to apply.

What is an expat mortgage?

An expat mortgage is a mortgage designed for non-UK residents who want to buy a property in the UK. It can be used to purchase a residential property or a buy-to-let property. However, because expats don’t live in the UK, they may face more restrictions and requirements when applying for a mortgage.

Eligibility criteria for an expat mortgage

The eligibility criteria for an expat mortgage can vary depending on the lender. However, there are some common requirements that expats need to meet to be eligible for a UK mortgage:

  1. Stable income: Lenders want to see that the borrower has a stable income to make mortgage payments. This means that the expat must have a steady job or source of income that can be verified.
  2. Good credit history: A good credit history is essential when applying for a mortgage. Lenders want to see that the borrower has a history of paying their bills on time and managing their credit responsibly.
  3. Deposit: Most lenders require a deposit of at least 25% of the property’s value. This means that the expat must have a significant amount of cash to put towards the property purchase.
  4. Documentation: Expats need to provide documentation to prove their income, employment, and identity. This can include a passport, visa, employment contract, payslips, bank statements, and tax returns. If the expat is self-employed, they may need to provide their company accounts, tax returns, and business bank statements.
  5. UK bank account: Some lenders require that the expat has a UK bank account. This can be difficult for expats who don’t live in the UK, but some banks offer international bank accounts that can be opened remotely. Normally banks like HSBC can allow mortgage clients to service their mortgages from Hong Kong.

Types of mortgages available for expats

There are several types of mortgages available for expats, including:

  1. Fixed-rate mortgage: A fixed-rate mortgage offers a fixed interest rate for a set period, usually two, three, or five years. This means that the borrower knows exactly how much they will pay each month, making budgeting easier. After the fixed-rate period ends, the interest rate will revert to the lender’s standard variable rate.
  2. Variable-rate mortgage: A variable-rate mortgage has an interest rate that can change at any time, depending on the lender’s standard variable rate. This means that the borrower’s monthly payments can go up or down. However, variable-rate mortgages usually offer more flexibility, such as the ability to make overpayments or pay off the mortgage early without penalty.
  3. Interest-only mortgage: An interest-only mortgage allows the borrower to pay only the interest on the loan for a set period. This means that the monthly payments are lower than a repayment mortgage. However, at the end of the term, the borrower will need to repay the full amount borrowed.
  4. Repayment mortgage: A repayment mortgage requires the borrower to make monthly payments that cover both the interest and the capital. This means that the borrower will own the property outright at the end of the term.

How to apply for an expat mortgage

Here are the steps to follow when applying for an expat mortgage:

  1. Research lenders: Not all UK lenders offer expat mortgages, so it’s essential to research and compare lenders to find the best deal. It’s also important to check the eligibility criteria for each lender to make sure that you meet the requirements.
  2. Get a mortgage in principle: Before you start house hunting as it’s a good idea to get a mortgage first before searching for a property.