Once the emotional turmoil of losing a loved one eventually subsides and you discover that you have inherited a family property, you are likely to feel somewhat joyous. You might also be considering putting up more buildings on the land, for example. You might want to keep the UK property and rent it out, or buy a share from other family members. Whatever your plans, you will likely need a mortgage to make them happen.
Getting a mortgage as an expat is not always as straightforward as it can be for a UK resident. That is fine. If you have inherited property and need a loan to make more from it, this short guide explains how UK expat mortgages work.
Why Would You Need a Mortgage on Property You Inherited?
A lot of people believe that they cannot get a mortgage or borrow money against a home they inherit. That is not true. There are several reasons you might still need a mortgage, such as:
- To buy out other heirs – if you share the inheritance with other family members, you might need money to buy the house outright.
- To fix up or update the house – a mortgage can help pay for repairs on an older home.
- To pay taxes or estate costs – sometimes the property has debts or taxes that need to be paid.
- To release some money – some expats use the value of their home to release funds for other purposes.
If you know why you need the mortgage, it will be easier to find the right lender offering an expat residential mortgage in the UK.
What Is a Mortgage for Expats?
People who live outside the UK but want to borrow money against their UK home can apply for an expat mortgage. Standard mortgages are generally not available to people who do not live in the UK, so lenders have created specific products for expats to address this.
These mortgages take into account that your income might be in a different currency, your tax records might be from another country, and you might not have a recent UK credit history.
What Lenders Think About Expats
When you apply for an expat residential mortgage in the UK, lenders will look at:
- Where you live: Some lenders only accept applications from certain countries.
- Your income and currency: You need to show proof of income, which will be converted into pounds for affordability checks.
- Your credit history: Lenders will look at your UK credit history if you have one. If not, they might check your financial history in the country where you reside.
- Your plans for the property: Will you live in it, rent it out, or leave it empty? This determines the kind of mortgage you secure on the property.
Challenges for Expats
It is absolutely possible to get a mortgage while living abroad, though it is generally harder:
- Stricter checks – more documentation may be required, such as contracts, tax forms and bank statements.
- Fewer lenders – not all UK banks will lend to people living outside the UK, which is why specialist expat lenders exist.
- Higher interest rates – lenders often charge more for expat loans because they consider them higher risk.
- Currency issues: if you earn money in a different currency, the exchange rate can affect your application.
Many expats seek help from a specialist for exactly these reasons.
Why Should You Hire an Expat Mortgage Advisor?
It can be easier to get a mortgage as an expat when working with a professional. They know which banks and other financial institutions will work with British expats or foreign nationals now living overseas.
A specialist expat mortgage broker will:
- Source the whole market to determine which expat mortgages offer the best rates and terms.
- Help gather and prepare all the required paperwork.
- Establish whether you need a residential mortgage or a buy-to-let product.
- Reduce the risk of applying to lenders who would otherwise decline your case.
How to Improve Your Chances
Your chances of being approved first time, with a smooth application, improve significantly if you prepare well. This includes:
- Getting your papers in order, including your ID, proof of address, income and tax information
- Checking your UK credit report and making sure it is correct, if you still have one
- Picking the right type of mortgage: if you want to rent the property, you will most likely need a buy-to-let expat mortgage
- Getting help from a specialist mortgage advisor, who will know which lenders suit your situation
Frequently Asked Questions
Do I need probate completed before mortgaging an inherited property?
Probate usually needs to be granted and the property transferred into your name before you can mortgage it. Lenders require you to be the legal owner to secure a loan against the property. Starting the mortgage conversation while probate is underway means you are ready to proceed once it completes.
Can I remortgage an inherited property to release equity while living abroad?
Releasing equity from an inherited UK property through a remortgage is possible for expats, subject to the lender’s criteria. The amount available depends on the property value, your income and the lender’s maximum loan-to-value. The released funds can be used for purposes such as renovation or purchasing elsewhere.
Do I have to settle inheritance tax before I can mortgage the property?
Inheritance tax is usually dealt with as part of the estate before the property passes to you, rather than at the mortgage stage. Once you own the property outright, you can mortgage it in the normal way. A solicitor handling the estate can confirm the tax position for your circumstances.
Can I get a mortgage on an inherited property I plan to rent out?
An inherited property you intend to let can be financed with an expat buy-to-let mortgage rather than a residential one. Lenders assess the expected rental income alongside your own, and criteria differ from owner-occupier lending. A broker can identify products suited to letting an inherited home from overseas.
Last Thoughts
If you live outside the UK and inherit a home there, it could be a significant financial opportunity, but you might still need a mortgage to get the most out of it.
Expatriates can get UK expat mortgages, but they may cost more and require a more complex application process. Working with an expat mortgage specialist will help you find the right lender and guide you through the process.
Expat Mortgages UK is a specialist broker directly authorised and regulated by the Financial Conduct Authority. We work exclusively with expats and foreign nationals buying UK property with overseas income. Your home may be repossessed if you do not keep up repayments on your mortgage.
Call: +44 1494 622 555 Email: info@expatmortgages-uk.com
Related Pages
- Residential Mortgages for Expats – financing a UK home to live in as a British expat or foreign national.
- Expat Buy-to-Let Mortgages – financing options for expats investing in UK rental property.
- Documents Needed for an Expat Mortgage – the full paperwork checklist to prepare before you apply.
- The Role of Credit History in Expat Mortgages – how lenders treat a thin or overseas credit file.
- Expat Mortgage Calculator – get an instant estimate that allows for foreign currency income.