UK Mortgages for Expats & Foreign Nationals Living in France
If you’re a UK expat and living in France, it can be tough – but not impossible – to get a mortgage. There are many obstacles that could stand in your way, and these can include exchanges in currency exchanges, lender regulations and profit verification issues. You might find it very difficult to get a mortgage from a traditional high street bank too.
However, an expat mortgage broker can help you get the outcome that you’re looking for and use their experience to help you acquire a property in the UK whilst you’re based in France.
Who Can Apply for Expat Mortgages in France?
If you’re a UK citizen who has moved to France to work, to retire or for anything else, there’s a good chance you could get a UK expat mortgage. You may also get the approval you need if you’re a non-UK citizen who lives in France.
You’re much more likely to get a mortgage for a UK property from France as a salaried individual. Help is available for the self-employed as well as people who work directly for an organisation. A specialist mortgage broker can assist you whether your income comes from the UK, France or another country.
How Big Does My Deposit Need to Be to Buy UK Property in France?
You’ll normally need to pay a deposit of 25-40% of the value of the property. Factors that can determine just how much you’ll need to pay include your financial profile and the lender’s specific requirements.
Will A Poor Credit Rating Make It Tougher?
A high credit score can make things easier, but brokers often work with lenders who specialise in helping those with non-perfect credit. A credit broker like Expat Mortgages UK can connect you with lenders who don’t expect applicants to have a perfect credit rating.
What Kinds of Mortgage Options are Available for UK Expats in France?
An expat buy to let mortgage could be a good option for you if you want to make rental income. When a lender is making a decision on a BTL mortgage, they’ll look at the potential rental income. It’s normally essential that this covers your mortgage payments and that it exceeds costs by 125-145%.
As you’ll be based in France whilst letting out the property to tenants, you’ll need to get a letting agent or a similar company to manage and maintain the property for you.
An expat residential mortgage could be a good option if you’ll be coming home regularly and need somewhere to stay whilst in the UK, or if you’re planning to move back permanently one day. You can get a residential mortgage if you’re not going to be letting out the property to anybody else.
With a residential mortgage, lenders will want to know what you’re planning to do with the property and whether you intend to live in it further down the line. You’ll also need to show the lender that you can afford the property whilst covering all costs related to your daily life in France.
You could also consider remortgaging if you already have a UK property. Remortgaging can help you get better terms and rates than you currently have and allow you to release equity from the property at the same time.
Make sure you’re carefully considering all costs when you want to apply for a mortgage. A broker can draw your attention to clauses like Early Repayment Charges (ERCs) that you might have to pay if your current mortgage ends early whilst still on a fixed rate.
Problems Expats in France Face & How We Can Help
Challenges you might face when you want to buy UK property from France include limited access to UK lenders, income verification, tough lending criteria and currency exchange fluctuations.
We can help by giving you access to specialist mortgage lenders who offer greater flexibility than mainstream banks. We also tailor our advice towards your specific situation to ensure bespoke guidance and support you every step of the way when it comes to gathering and uploading the documents you’ll need to work with estate agents, solicitors and lenders. We’ll never leave you in the dark when there’s important news to pass onto you.
You will also get access to your very own dedicated Case Manager, who you can contact directly via either phone or email. No matter when you contact us, your query will be dealt with by someone from our in-house team. We also give you access to a special client portal where you can get a clear overview of your current application status and receive real-time updates.
UK Expats in France: How Does the Mortgage Application Process Work?
The process will begin with your initial consultation. During this consultation, we’ll take a close look at your earnings, deposit amount, employment status, credit reports and current financial commitments. Your advisor will use this information to scour the entire market to find you suitable lenders and mortgage products.
We’ll work with you to help you collect all the paperwork you need, from payslips and tax returns to ID and evidence of your residency status. We’ll also need a UK credit report if this is possible, but you can alternatively use a French one.
We’ll complete and submit the application form to the lender for you and ensure it’s submitted in the lender’s preferred format and style to prevent any delays. Before the lender approves your application, they’ll need to carry out a valuation of the property and check its condition. If they are happy with these, they will issue a formal mortgage offer to you.
There will then be a few more steps to go through including the exchange and signing of contracts. After this, the funds will be released, the transaction will be completed, at which stage you will officially own your UK property!
Interested in finding out monthly mortgage costs and deposit needed? Try our Expat Mortgage Calculator UK today.
Why Choose Expat Mortgages UK?
There are many great reasons for choosing us when you want to buy UK property from France. We have whole-of-market access to lenders which helps you secure the very best terms and rates as well as vast experience in helping UK expats and foreign nationals living in France.
Our expat mortgage services are personalised and tailored towards your very specific needs, and our innovative client portal means you’re always in the loop when it comes to the latest application updates.
Tax Implications of a UK Mortgage When Living in France
If you are a foreign national or UK expatriate living in France who has a mortgage on a property in the UK, it is very important to consider the cross-border tax implications that may arise in either of the countries. You may be liable to pay UK tax on rental income or capital gains from the property via HM Revenue & Customs (HMRC) and you may impose tax in France via Direction Générale des Finances Publiques. It is important to plan appropriately to avoid double taxation, compliance breaches or missed opportunities for tax relief.
Rental Income from UK Property
Let’s say you are living in France, and renting your property in the UK – then you are required to report rental income and pay UK income tax via the UK Self Assessment process when due. You will be able to reduce your UK tax obligation by deducting allowable expenses, e.g. mortgage interest, maintenance, letting agency fees, insurance, etc.
You will also have to report your UK rental income on your French income tax return because as a French tax resident, you will be potentially be taxable on your worldwide income. In a similar vein, France will tax the UK income on your French income tax return, however in general terms the countries should not essentially tax the same income – the UK – France double taxation treaty will generally prevent this, therefore in a normal situation, tax paid in the UK will be able to be claimed as a foreign tax credit against the France liability on the same income.
Deductions of UK Mortgage Interest in the French Tax System
When it comes to the French tax system, if mortgage interest on a UK property is eligible for deduction from your French taxable income depends on how the property is used. If the property is rented out to tenants, then the mortgage interest and related costs may be deductible from the rental income declared in France. If the property has been used for personal use (as a second home or a holiday dwelling, for example), the mortgage interest cannot be deducted for French tax purposes.
Selling Your UK Property
When you sell your UK property for a profit, you will normally be subject to UK Capital Gains Tax (“CGT”). However, you will also be liable to French capital gains tax for the same gain as a French resident. You will have to declare the capital gain in France even if you already have paid tax as CGT in the UK. The UK–France Double Tax Treaty should prevent you from being double taxed on your gain, usually by allowing you a credit for UK tax paid.
Depending on your circumstances, France may afford you specific reliefs or allowances, such as exemptions for how long you owned the property or reinvested the gain in a main residence. Therefore, you should make sure that you understand which exemptions may apply to you.
Declaring Foreign Assets to French Authorities
France has very strict rules for declaring a foreign asset. If you have a UK property – or any foreign bank account, trust or investment you must declare it to the French tax authorities, using Form 3916 (bank accounts) and 3916-bis (real estate & other financial assets). Otherwise, you could face hefty fines!
Consult with a Cross-Border Tax Specialist
Due to the complexity of dealing with the UK and French tax systems, as well as the possibility of double taxation, non-compliance or missing reliefs, we strongly recommend working with a tax advisor who has experience and knowledge of UK–France cross-border taxation.
A competent Tax Advisor will not only keep you compliant, but also strive to help you reduce your tax liabilities and find ways to make your overall financial affairs more efficient in both countries.
FAQs About UK Mortgages for Expats in France.
I earn my money in Euros, can I still get a UK mortgage?
Yes absolutely! When lenders look at your income they do allow for currency fluctuations. We can help you find a lender that treats those earning overseas income fairly.
What is the minimum deposit required for UK mortgages for expats in France?
You’ll normally need to pay a deposit of at least 25%, although this can be lower in some situations.
I have no French income, can I still apply for a mortgage?
If you don’t have any income from France but do have some from other sources, these may be considered when the lender is checking your overall affordability. Make sure you provide comprehensive evidence of all your income to strengthen your application.
How long will it take to get a French UK expat mortgage approved?
It can take anything from two to six weeks to get a mortgage application approved. Factors that can determine the time it takes include dealing with files, waiting for responses, submitting the paperwork and getting the property valued.
I want to move back to the UK in future, will my application be approved?
Yes no problem, as mortgage lenders often look favourably upon application from clients wanting to return to the UK in future as this demonstrates long-term ties to the UK.
UK Expat Guide to Living in France: Best Cities, Regions & Property Hotspots
France is an excellent choice for people moving from the UK who are looking for a great quality of life, exceptional scenery and brilliant weather. There are many options available to you, and you should find somewhere suitable whether sunny coastal towns, country retreats or exciting cities appeal to you.
Paris, the capital of France, is renowned for its world-class job market, iconic sights and outstanding transport links. Also popular are the Dordogne and Provence regions due to their classic villages and picturesque vineyards.
Occitanie includes what used to be known as Languedoc-Roussillon and has become very popular recently due to its generous amount of sunshine and affordable property. Brittany is very popular with families, whilst Nouvelle-Aquitaine has become home to many happy UK expats over recent years.
France’s healthcare system, quality of public services and relaxed lifestyle have made it one of the destinations many people think of first when they want to relocate from the UK. It’s also a very popular choice amongst expats due to its proximity to the UK. In fact, the closest points between France and the UK are just 20 miles apart.
Contact Expat Mortgages UK
At Expat Mortgages UK, we make it much easier for you to secure a UK home mortgage for a British expat living or foreign national living in France. Talk to us today to turn your vision into a reality, make a UK property yours from France and receive flawless and impartial advice every step of the way.
Why not get in touch right now?