Non-residents can obtain mortgage loans in the United Kingdom on practically the same terms as UK citizens. However, not every UK bank provides loans to non-EU residents. One key advantage of UK mortgages is the relatively small down payment (starting from 20% of the property value). Short loan terms are a key disadvantage (up to five years).

Foreign mortgage loan terms in the UK (December 2016)Source: London Relocation Consultancy, Tranio´s partner in the UK

Maximum LTV ratio 75-80%
Minimum loan amount £100,000
Fixed rates From 1.95% to 3.50%
Loan term 2-5 years
Minimum age of borrower 18
Maximum age of borrower
by the end of the loan term
60
Maximum percentage of monthly
income for mortgage
40%

Documents

To get a mortgage loan in the UK, you need to submit the following documents to the bank:

  • passport copy
  • bank statements for the six previous months confirming regular income (salary, dividends, rental income, bonuses)
  • personal income tax forms for the two previous months.

Banks also request proofs of assets, i.e. proof of property ownership and investment, account or bank deposit statements, etc.

Typically, the more income-related information the borrower provides, the more favourable the mortgage terms will be. All the documents must be translated into English and notarised.

Loan applications usually take 2-12 weeks for approval.

Extra costs

The costs incurred by the borrower when formalising a mortgage in the UK tend to amount to about 1% of the property value. There are also additional life and property insurance fees. The exact amount to be paid depends on a variety of factors.

Additional mortgage costs in the UK (as of December 2016)Source: London Relocation Consultancy, Tranio´s partner in the UK

Property appraisal and Due Diligence £850-2,500 (0.3% of the property
value on average)
Borrower's life and property insurance £1,000-5,000 per annum
Mortgage arrangement fee 1% of the loan amount
Early repayment penalty
(not applicable to floating rates)
1% of the remaining
debt amount
 
 
Free advice on real estate in the United Kingdom
Alexandru-Viorel Hincu
Property Advisor
+44 20 3608 1267
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