UK Mortgages for Expats & Foreign Nationals Living in Cyprus
If you are a British expat living in Cyprus and wanting to buy a property in the UK (a residential or an investment/buy-to-let property), it can be a bit tricky dealing with the mortgage process when you are living abroad. There are some lending rules in the UK, currency issues, proof of income, and paperwork across borders – these are just a few of the areas that can add complexity.
This guide details everything you need to know to secure a UK mortgage while living in Cyprus and how our expert team at Expat Mortgages UK can help you.
Why Cyprus-Based Expats Choose to Invest in UK Property
Numerous British expats living in Cyprus retain strong financial and family connections to the UK. Buying property in the UK could provide:
- A stable and potentially appreciating market for real estate
- A rent-generating investment asset
- A base to return to when residing back in the UK
- A hedge against currency fluctuations
Whether you have moved to Cyprus to retire, work, or simply for the lifestyle, many will continue to view the UK property market as a top investment destination.
Understanding UK Mortgages for Expats
A UK mortgage for expats is a loan for a home or remortgage for people who live outside the UK but are looking to acquire property or remortgage a property in the UK. Expat mortgages differ slightly from regular UK mortgages because:
- Residency status
- Income in foreign currency
- Cross-border documentation
- Additional risk factors for lenders
Most UK High Street banks have restrictions for expat mortgage lending. However, there is a wide range of specialist lenders and private banks offering mortgage products for expats living in Cyprus and other countries. A large number of these lenders are only available via specialist brokers like Expat Mortgages UK, so contact us today in order to secure the very best deal available across the whole market, with a free quote and advice.
Key Features of Expat Mortgages from Cyprus
Loan to Value (LTV) ratios
Most expat lenders will accept 60% to 80% LTV with some offering 85% for prime applicants. This means that you will typically require a deposit of between 15% to 40%. The % for the deposit will depend on the type of property and your profile as the borrower.
Loan sizes
Minimum loans are typically £100,000 but some lenders will accept a lower loan amount. The maximum loan can vary from lender, but can reach millions for high-net-worth clients or for prime properties in London.
Types of mortgages
Buy to Let (BTL) Mortgages– are ideal for purchasing a property for rental purposes. They will require a larger deposit (typically 25% – 40%) and put a greater emphasis on rental income (the rent paid by future tenants) rather than just the income of the borrower.
Residential Mortgages – when you intend to live in the property at some point you will need to get a residential mortgage. Residential mortgages are usually cheaper and often have better rates than buy-to-let mortgages.
Remortgages – is an excellent option if you currently own a property in the UK and want to switch lenders or release equity – especially in circumstances where you are going from a more expensive expat mortgage to a regular mortgage as a UK resident.
Currency
Lenders specialising in expat lending typically take your income in Euros (EUR) but fluctuations can affect affordability assessments and risk profiles for lenders.
Common Mortgage Scenarios for Cyprus Expats
Returning Back to the UK
If you move back to the UK and find that you can obtain a residential mortgage whilst living abroad, this enables you to purchase property before you arrive back.
Property Investment
Buy-to-let mortgages are great for anyone who wants rental income whilst living overseas in Cyprus. There are some cities in the UK, such as Manchester, Birmingham and Leeds, that provide excellent rental yields and experience very high demand for tenants.
Remortgaging
There may be a number of reasons why you may wish to remortgage:
- Move to a different lender
- Take equity out of your home
- Move to a cheaper interest rate
- Current mortgage term expires
All of these scenarios are possible as an expat even if you no longer live in the UK, but live overseas in countries such as Cyprus.
Our Step-by-Step Mortgage Process
Step 1: Preliminary Assessment
We start with your residency, income, employment and property plans. This allows us to find the right lender to create your tailored mortgage options.
Step 2: Tailored Consultation
An Expat Mortgage Advisor will carry out a 1-on-1 call to discover the goals of your mortgage application, and ask questions to find out what is important to you. In this step, we will agree what LTV we expect, and some indicative rates and renewal documentation.
Step 3: Market Search
Our whole-of-market access will mean we can look at all mainstream and specialist lenders to ensure you don’t miss the most competitive deal available to Cyprus-based expats.
Step 4. Agreement in Principle (AIP) / Decision in Principle (DIP)
Once you have been matched, we will obtain an AIP / DIP so you have clarity around your borrowing capacity and we can strengthen your negotiating position on a UK property.
Step 5. Full Application Submission
Our team help you prepare the necessary documentation, which includes translations and/or notarisations, and keep your application strong, complete and submitted. We will submit the application for you directly with the lender and fully manage the entire process for you.
Step 6. Property Valuation and Offer
The lender will arrange a valuation, and once accepted, they will provide a formal written “Mortgage Offer”. We support the solicitors and estate agents to ensure the process continues as planned.
Step 7. Completion and ongoing support
Once completed, we will continue to support you with remortgage advice, rate reviews, building your portfolio and more.
Documentation Requirements
Although requirements differ slightly from lender to lender, you should be prepared to provide the following:
- A valid UK passport
- A Cyprus residence permit or proof of address in Cyprus
- Recent bank statements (3 – 6 months)
- Payslips or accounts if self employed
- Tax returns or accountant verification
- Proof of UK property if over mortgaging
- Credit Report (UK and/or Cyprus)
Some documents may need translating or may need notarised copies. We provide full support and will guide you through every step of the process.
UK Expat Guide to Living in Cyprus: Best Cities, Regions & Property Hotspots
Cyprus has been a popular choice for UK expats for many years, thanks to having year-round sunshine, a laid-back Mediterranean lifestyle, and an English-speaking environment. Whether your main focus is on relaxation and retirement, a lively coastal town, or you are looking to invest, there are many attractive options throughout Cyprus.
Best Cities & Regions
Paphos is among the most popular options for British expats. A UNESCO World Heritage site, it combines ancient history with modern living. With international schools, health care facilities and a large English speaking population it is a great place for both retirees and families.
Limassol is a cosmopolitan city with many professionals and entrepreneurs calling it home. The modern marina, luxury developments, and lively nightlife scene make it an important economic hub in Cyprus. Limassol has good international schools and is well-connected to the rest of the island.
Larnaca offers a more relaxed lifestyle still connected to the urban conveniences and amenities. With its beaches, more affordable cost of living and proximity to the main airport on the island, Larnaca makes domestic and international travel to and from the UK a breeze.
Nicosia, as the capital of Cyprus, is more suited to people who are going to be working in Cyprus. The city has a strong business environment and many cultural and leisure attractions, however, being inland brings its downsides, particularly when compared to the more coastal cities in Cyprus.
Property Hotspots
Paphos’s Tombs of the Kings area and Germasogeia, Limassol are both recognised for their recent developments and strong rental potential. Oroklini near Larnaca and Paralimni near Protaras are also becoming attractive property hotspots; value for money and expanding ex-pat communities.
Cyprus has a simple residency application process for EU and non-EU citizens, it has low crime rates, a tax-friendly society, and is still popular with UK expats for sunshine, sea, and an inviting existence abroad.
Cyprus-Specific Considerations
Types of employment
In Cyprus, retirees, employees (often in tourism, shipping and finance), and self-employed people are available. Our clients include all forms of income categories, including:
- Salary in EUR
- UK pensions
- Dividends or investment income
- Self employed with audited accounts
Currency stability
The Euro is widely accepted by most UK mortgage lenders, but they will still consider the exchange rate risk. Clients with a stable income and a low ratio of debt will consider currency fluctuations to be acceptable, as long as it is not ‘surging’ on a long term basis.
Residency & Tax
Living in Cyprus could affect your tax status in the UK. This doesn’t directly impact your mortgage approval, however it’s recommended to consult with a specialist Tax Advisor to determine any impacts it may have.
Legal Process
UK property law applies, but we will arrange everything that’s needed from a UK Solicitor and can even provide you with recommendations from our panel of approved solicitors for expat mortgages.
Tax Considerations of a UK Mortgage When Living in Cyprus
If you’re a UK expat or foreign national living in Cyprus who owns a UK property with a mortgage, you will need to pay attention to the tax implications of holding foreign assets. Cyprus has an attractive tax regime for residents, but taxing rights on UK-sourced income and gains generally remain with the UK, particularly rental income and the sale of a property.
Interested in finding out monthly mortgage costs and deposit needed? Try our Expat Mortgage Calculator UK today.
UK Rental Income: Still Taxable from Abroad
If you are renting out your UK property whilst living in Cyprus, you will still have a liability for UK income tax on your rental income. It is done under the UK’s Self Assessment system. The taxable rental profit can be reduced by any allowable deductions that apply, such as mortgage interest, repairs and expenditure, letting agent fees, etc.
If you are a non-resident landlord, you may also have to register under the UK Non Resident Landlord Scheme (NRLS). This may require your tenant or letting agent to deduct the basic rate tax from your rental income unless you have been approved to received rent with no tax deduction and have to submit your own returns.
UK Capital Gains Tax when you Sell Property
If you are resident in Cyprus and sell your UK Asset you might still have a liability to pay UK Capital Gains Tax (CGT) on the gain. Since (2015 and extended in 2019) UK CGT applies to most disposals of UK residential property by non-residents. You even have a duty to report the disposal (and the gain) to HMRC even if no tax is payable.
Taxation in Cyprus
For non-domiciled residents, Cyprus does not tax foreign rental income or foreign capital gains, which can have substantial tax benefits. Nonetheless, your UK property and income you earn from it may need to be reported for information purposes on your Cyprus tax return, particularly if you have elected to be taxed as a Cyprus tax resident (under the 183-day or 60-day rule).
Additionally, no longer can UK individual landlords deduct mortgage interest when preparing their income tax return. Tax relief is now given as a basic rate credit. In most cases, mortgage interest on UK property is not deductible from a Cypriot perspective, unless the income is taxable locally (which often it is not).
Seek Specialist Tax Advice
Cross-border taxation issues between the UK and Cyprus are complicated and constantly changing. It is advised to seek professional advice from a tax adviser experienced in both UK and Cypriot tax regimes. This is particularly important if you have UK rental income, sell a UK property, or plan for inheritance.
Even though many potential reliefs from double taxation can be claimed for UK income tax, UK capital gains tax and Cypriot taxes, competent planning in advance of the activity needs to be well organised for compliance and efficiency.
UK Expat Mortgages Cyprus: Frequently Asked Questions (FAQ)
Can I get a UK mortgage as a non-resident living in Cyprus?
Yes. Many lenders offer expat specific mortgage products designed for non-UK residents.
What is the minimum income required?
It varies, but most lenders prefer at least £25,000 in annual income. Self-employed applicants may need two years of accounts.
Will my Euro income be accepted?
Absolutely! Most UK expat mortgage lenders will accept income in Euros, particularly from EU countries like Cyprus.
Can I get a mortgage with a foreign spouse?
Yes. Joint applications are common, even if one applicant is not a UK citizen, provided the income and documentation meet the lenders’ requirements.
Do I need a UK bank account?
Not always, but it may simplify rental income deposits, mortgage payments and legal processing. We always recommend setting up a UK bank account whenever possible.
Begin Your UK Mortgage Journey Today
Whether you’re buying your first UK investment property, remortgaging an existing one, or planning your return home, we’re here to help.
- Free Mortgage Quote: Submit a simple form to receive tailored mortgage options.
- Book a Consultation: Speak with an expat mortgage expert familiar with Cyprus documentation and income.
- Document Guidance: Receive a free checklist to prepare your application efficiently.
Final Thoughts
The UK property market is still a strong and stable investment opportunity for British expats. With localised advice and expert assistance, you can easily secure a mortgage from Cyprus while benefiting from your overseas income and links to the UK.
Expat Mortgages UK is here to help you finance a UK property whilst living in Cyprus with clarity, confidence and ease. So get in touch today for fully independent expat mortgage advice and a free quote from all UK expat mortgage lenders.
