UK Mortgages for Expats & Foreign Nationals Living in Brazil
It is becoming more and more common for Brazilian expats to purchase property in the UK. Knowing how mortgages for non-residents operate is crucial whether you’re planning a future move, investing in the UK property market, or even providing a home for your family while your kids are maybe studying elsewhere.
In this post Expat Mortgages UK provide a thorough examination of the steps, challenges, advantages and professional advice available for securing a UK mortgage as either a British expat, or Brazilian native residing abroad.
Why Brazilians Invest in UK Property
Robust and Steady Property Market
The UK property market continues to be a global safe haven, particularly in areas such as London, Manchester and Edinburgh. Foreign investors find the UK very appealing due to its political stability, property owner legal safeguards and steady long-term capital development.
Education Opportunities
In order to provide housing for their children who are studying in places like Oxford, Cambridge, or any other major University cities, many Brazilian families purchase properties in the UK. Over the length of a university degree, owning a home rather than renting frequently works out more economical.
Diversification and Wealth Preservation
In Brazil, middle-class professionals and high-net-worth individuals are increasingly seeking to diversify their assets abroad. Peace of mind is provided by UK real estate, a well-established legal system and a regulated mortgage market.
Who Can Apply for a UK Mortgage from Brazil?
To secure a mortgage on a UK home, you don’t need to be a UK citizen or even a resident. International clients can apply for mortgages from UK banks and specialist lenders, although there are frequently restrictions.
Applicants eligible for UK mortgages from Brazil include:
- Brazilian nationals with UK property or family ties
- UK expats who have lived or worked in the UK previously
- Brazilian passport holders with no UK ties
- Dual nationals (UK-Brazilian)
Types of UK Mortgages Available to Brazilian Expats
Buy-to-Let Mortgages (BTL)
Buy to Let Mortgages are perfect if you’re buying a house to rent out. In addition to requiring a greater deposit (generally between 25% – 40%), BTL mortgages are primarily assessed on the prospective rental income achieved, rather than just the borrower’s personal income.
Residential Mortgages
If you plan to live in the property at some point then you then you need a residential mortgage. Compared to buy-to-let mortgages, residential mortgages are usually less expensive and often have better interest rates.
Holiday or Second Home Mortgages
These mortgages offer flexibility for people who want a UK home for sporadic uses, such as family visits, business travel, or vacations.
Remortgages
A remortgage is a wise choice if you currently own property in the UK and wish to change lenders or release equity, particularly if you’re switching from a more costly expat mortgage to a standard mortgage as a UK resident.
Expat Mortgage Eligibility Criteria
There are several factors which lenders use to determine your eligibility for the mortgage which we detail below:
Employment & Income
UK mortgage lenders will usually require:
- A steady income, accompanied by supporting documentation such as payslips, tax returns, or company accounts if applicable
- Evidence of work or self-employment
- Documents issued in Portuguese that have been translated into English and authenticated
Credit History
A UK credit score is not always required by lenders, although it is always beneficial if you can provide one. However, most lenders will need visibility of the following items:
- Foreign credit reports (if available)
- Any current loans or financial accounts in the UK (such as banks, credit cards)
- Proof of paying bills on time
Risk of Currency and Exchange Rates
Your income will probably be in Brazilian Reais (BRL), but your mortgage payments will be in GBP. To protect themselves from exchange rate risk, lenders may use what is known as a “currency haircut” – so they may only accept 80% of your income to make sure you can afford the loan.
Property Value & Type
High-value properties might be able to get international private banking or custom lending packages. Most lenders prefer freehold properties or standard leaseholds that have at least 80 years left on the lease.
Deposit Requirements and Interest Rates
Deposit
- The typical minimum deposit is 25%.
- 30–40% is required for higher-value properties or unusual circumstances.
- Stricter requirements might apply to first-time investors.
Interest Rates
- Interest rates can be both fixed and variable.
- If your entire wealth is managed with a private bank, they may offer customised packages with lower rates.
- Because of perceived risk, rates for foreign borrowers are frequently a little higher than those for UK residents.
UK Expat Guide to Living in Brazil: Best Cities, Regions & Property Hotspots
In Brazil, British expatriates are dispersed throughout a few major cities and areas that provide a blend of career opportunities, high-quality living, and cultural diversity. Despite Brazil’s size and diversity, some regions regularly draw British citizens because of their international communities, infrastructure, safety, and climate.
One of the most well-known travel destinations for British expats is still Rio de Janeiro. World-class beaches, a relaxed lifestyle, and access to first-rate medical care and international schools are all features of wealthy communities like Leblon, Ipanema, and Barra da Tijuca. The city appeals to people seeking both employment and a fulfilling personal life because of its vibrant culture, which is expressed through music, festivals, and the natural environment. Rio’s natural beauty and outdoor lifestyle are other reasons why many retirees choose it.
Brazil’s economic centre, São Paulo, is home to a sizable British community as well as a large international population. British expats who work in international trade, finance, law, or education frequently settle in posh areas like Jardins, Itaim Bibi, or Morumbi, where expatriate services are readily available and English is more widely spoken. The city has a flourishing arts and culinary scene, first-rate private schools, and hospitals.
Families looking for a more tranquil lifestyle, remote workers, and younger professionals have come to love Florianópolis, also referred to as “Floripa” further south. It is among the best-rated Brazilian cities for quality of life because it offers stunning beaches, safety, and a high standard of living.
People interested in Afro-Brazilian music and culture, as well as a lower cost of living, are drawn to Salvador, which is in the northeast. Because of its well-planned layout and strong infrastructure, the capital, Brasília, is also home to a large number of British diplomats, NGO employees and foreign consultants.
Together, these regions provide British expats with a wide range of options for juggling their lifestyle goals and work requirements in one of South America’s most vibrant nations.
Required Documents
Generally, in order to apply for a UK mortgage from Brazil, you will need:
- A current passport (and visa, if necessary)
- Documentation of address in Brazil (bank statement or utility bill)
- Evidence of income, such as tax returns, payslips, or employment letters
- Bank statements for the previous three to six months
- Information about the UK property being bought
- Evidence of the source of the deposit
- Credit report (international or Brazilian, if available)
Note – every document will need to be translated into English and, if necessary, certified.
What Happens When You Move Back to the UK?
If you take out an expat mortgage while living in Brazil and later return to the UK, it’s important to update your lender.
Why it matters:
- You may be eligible for a better interest rate on a standard UK residential mortgage.
- Lenders may require a change of use declaration if the property shifts from let to owner-occupied.
- You may be able to remortgage for a better deal or release equity.
Always consult a specialist expat mortgage broker before making changes to ensure compliance and avoid penalties.
Tax Considerations of a UK Mortgage When Living in Brazil
If you are a UK expat or foreign national residing in Brazil with a mortgage on a UK property, you need to consider the tax implications of owning an asset in another tax jurisdiction. Brazil has its own personal income tax system which includes taxation of worldwide income and assets. The UK also has taxing rights over income and gains from UK sourced assets, such as rental income and capital gains from UK property.
UK Rental Income: Taxable from Abroad
If you let your property in the UK while you are living in Brazil, you will still have UK income tax exposure for any rental income that you receive. The UK tax obligation is through Self-Assessment which means you need to declare your income and pay tax on your profits. You can normally claim allowable expenses (mortgage interest, repairs, letting agency fees and building maintenance) which will help reduce your taxable income in the UK.
As a non-resident landlord, the NRLS (Non-Resident Landlord Scheme) may apply to you; the scheme will mean that your letting agent or tenant will withhold UK basic rate income tax at source. If you had registered under the NRLS you may be able to receive rent gross and undertake your tax obligations directly by filing your own returns to HMRC.
Taxation in Brazil: Worldwide Income and Assets
Brazil taxes the worldwide income and wealth of its residents. Although UK rental income would not be taxed as regular income in Brazil and your UK property would be treated as wealth, the value of your foreign wealth or assets may influence your tax situation in Brazil. Brazil taxes wealth progressively and any foreign assets may be taken into account for the purposes of the tax, which could eventually affect those with a significant amount of wealth abroad.
Even though Brazil does not tax rental income specifically (assuming you are not repatriating it into Brazil) the value of your UK property is part of your wealth declaration and could affect your overall tax position in Brazil in the event the UK property may be part of a much larger foreign asset portfolio.
Mortgage Interest Relief and Deductibility
Mortgage interest tax relief in the UK has been increasingly restricted in recent years – especially for higher-rate taxpayers. This has made it less beneficial for you to offset mortgage interest expenses against your rental income in the UK. Now, consider the impact to your net rental income, and if your UK property is still providing a positive return.
For Brazilian purposes, you are not able to offset the mortgage interest on your foreign property for income tax but the outstanding amount on the mortgage can be included to reduce the net value of your foreign assets for calculation purposes of wealth tax, potentially reducing any assessed wealth tax based on your global total assets.
Capital Gains Tax on UK Property Sales
Selling a UK property whilst living in Brazil will make you liable for UK Capital Gains Tax (CGT) on any gains on the sale. In 2015 and again in 2019, rules that mean that most disposals of UK residential property by non-residents fall under the UK CGT umbrella as either UK residents or non-residents had exemptions or allowances that may now apply, but these have become more restrictive over time. Regardless of whether you owe tax, you are obliged to make the notification to HMRC.
When you dispose of private property, Brazil does not typically impose tax on the capital gain. Nevertheless, you should double-check that the sale does not impact your overall wealth tax calculation or create additional obligations under Brazilian taxation, particularly if the sale gives rise to foreign currency gains or has other taxable outcomes.
Seek Specialist Tax Advice
Working through the tax regulations in Brazil, particularly when dealing with foreign structures and UK properties, can be very complicated. Both the UK and Brazilian tax systems can change, and it is important to understand the tax regulations and how they apply to your unique circumstance.
Considering the complexity of cross-border taxation, we would strongly recommend you to consult a Tax Advisor who understands both the UK and Brazilian tax systems. This is even more important if you are considering buying, selling, or renting UK property whilst you are resident in Brazil. A professional tax advisor will help you navigate the relevant tax rules, make sure you are compliant, and optimise your tax situation.
Tips for Brazilian Expats Applying for a UK Mortgage
Use of an Expert Mortgage Broker
They will be aware of which lenders are best placed to work with documents and income from Brazil.
Get a Decision in Principle (DIP)
Before looking for a property, always get a DIP as this shows the seller that you’re serious and can secure a mortgage.
Create a Credit Profile in the UK
Keep UK-based bills in your name and, if at all possible, keep a UK bank account.
Allow for Changes in Exchange Rates
Maintain a GBP bank account for repayments or hedge your currency risk.
Plan for the long term
Think about your exit plan – do you plan to return to Brazil or live in the UK? Will you sell the property, rent it out, or keep it?
Interested in finding out monthly mortgage costs and deposit needed? Try our Expat Mortgage Calculator UK today.
How we can help
Securing a mortgage on a UK property while residing overseas, particularly from Brazil, can be tricky. There are particular difficulties in the process, such as comprehending the requirements for foreign loans and handling documentation from a distance.
Don’t worry – we can help with it all!
Expat Mortgages UK are experts at securing the best mortgage options for British expats and foreign nationals residing abroad, including in Brazil. We are very familiar and experienced with the process and offer complete end-to-end assistance, taking care of everything from all paperwork to lender negotiations, so you can sit back and relax.
Your UK mortgage journey from Brazil is made so much quicker, easier, and less stressful when you work with us.
Why not contact us right now to see for yourself?
