UK mortgages and home loans for foreigners: US guide

Although many foreigners arrive in the UK for a shorter stay, to study or explore, many settle for the longer term. If you're one of them, then you might be considering buying your own property.

To do that, you need to understand how to get a mortgage in the UK and what to expect from the process. While some banks offer mortgages and home loans in the UK to non-residents, it'll be harder for you to get financing than in the US.

But it's not impossible. Here's everything you need to know. We’ll also introduce Wise, an easy way to send money to the UK with low fees - even for large transfers.

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Table of contents

Can US citizens get a mortgage in the UK? What types of mortgages are available in the UK? How much do you need for a down payment for a UK mortgage? Buying property abroad? Send money the hassle-free way with Wise Things to consider before applying for a UK mortgage What documents are required to get a mortgage in the UK? How to apply for a mortgage in the UK: step-by-step How long does it take to get a mortgage approval in the UK?

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Can US citizens get a mortgage in the UK?

Yes, US citizens can get a mortgage in the UK, but the process is more challenging than it is for UK citizens.

As a foreign national (anyone without a UK passport or permanent residency), your chances of approval mainly depend on your income situation and connection to the UK.

It's much easier to get a UK mortgage if you have permanent residency or indefinite leave to remain (ILR). In these cases, the application process is mostly similar to what UK nationals go through.

Without permanent residency or if you're not actually living in the UK, lenders view you as a higher risk. This means you'll likely need a larger down payment and face stricter financial checks.

If you have a UK work visa (and a high-paying job), it can help your application.

What are the legal requirements to get a mortgage in the UK as a non-resident?

Foreigners, resident or not, can legally buy property and apply for a mortgage in the UK. But the requirements largely depend on your legal status in the UK. You might find that you're offered less favorable conditions or higher interest rates as a foreign buyer.

If you're in the UK legally (for example, on a work visa, or even better, have indefinite leave to remain or ILR), you'll typically have to meet standard mortgage requirements, such as a stable job with regular income and a good credit history in the UK.

You'll also typically need to have at least 2 years of UK residency and have a 5-10% down payment ready (more if you've lived in the UK less than 2 years).¹

Non-residents or those with limited UK connections face stricter requirements:
Much larger down payments (usually 30% or more)¹ Proof you earn enough to repay the loan Evidence of UK connections (previous residence, employment, or family) An acceptable visa type

Without UK residency, you'll also likely need to pass thorough background checks.

What types of mortgages are available in the UK?

The mortgage market in the UK is very well developed. In fact, the choice of different mortgage products can be overwhelming, so you need to know a bit about how each of them works, to make a considered decision.

The first thing you have to decide is whether you want a fixed-rate or variable-rate product.

Fixed-rate mortgages will guarantee the same interest rate will be applied for the duration of the agreement.

Variable-rate mortgages, however, can cost more or less depending on how the interest rates change. They might be based on the Standard Variable Rate (SVR) your bank decides on or the Bank of England (BoE) rates.

Some products match the SVR or BoE rates exactly, some are slightly higher than these rates, but track them as they move up and down, and some offer a discount on these rates - typically only for a short period.

There are also different products that are available only to buyers in specific situations. First-time buyers, or those purchasing a second home for buy-to-let, for example, might be entitled to different offers than other buyers.

What are the major banks in the UK providing mortgages for foreigners?

All major banks and building societies in the UK offer mortgage products, but they might not all have a service suitable for expats or non-residents. Ultimately, the decision about who is eligible for a mortgage or home loan is made by the institution.

It’s worth calling into the local branch of banks which you’re interested in for a chat about which products might suit you - or enlist a broker to help.

You might be able to get a UK mortgage as a foreigner with one of the following banks:

• HSBC is a global banking brand, offering a specific mortgage service for non-UK and new-to-UK residents
• Barclays has services dedicated services to expats with a high net worth
• Natwest can offer UK mortgages to residents of certain countries looking to buy in the UK (including the US)
• Skipton International has a specific buy-to-let product for expats investing in the UK

Should I go to a bank or use a broker?

In the UK it's perfectly possible to arrange a mortgage directly with your chosen bank.

However, in some cases, and especially if you’re not sure what type of product is best for you, taking expert advice from a qualified mortgage broker is a good idea. It’ll cost you but could work out good value in the end.

That’s because a mortgage broker is obliged to work in your interests and explain in detail why they recommend a specific product for you. If you’re unhappy with their services, you can lodge a formal complaint.

Read further
Guide to international mortgage lenders Funding your overseas property purchase guide Overseas property mortgage: explained

How much do you need for a down payment for a UK mortgage?

As a foreigner, expect to pay a larger down payment than UK citizens or residents. The exact amount depends on your ties to the UK.

If you have permanent residency or indefinite leave to remain (ILR), expect a minimum 5-10% down payment, but you may need more if you've lived in the UK for less than 2 years.¹

For other foreign nationals, a 25-40% down payment is typical. Lenders require larger deposits to offset their risk.¹

Ultimately, your exact down payment amount will also depend on factors like your income level, credit history, and how long you've been living in the UK.

Additional fees and costs

Arranging a mortgage in the UK will mean you have fees to pay such as administrative fees and legal costs. The exact costs will vary depending on your circumstances, but when you add it all together, it’s a costly transaction.

Fees you can expect:

• Mortgage booking fee: typically 100 GBP to 200 GBP²
• Arrangement fee: up to 2,500 GBP³
• Property valuation fee: typically 150 GBP to 1,500 GBP⁴
• Broker fee: can vary from around 0.35% of the loan size to up to 1%⁵

When buying UK property as a non-resident, you'll also have to pay higher Stamp Duty Land Tax (SDLT) rates than UK residents.

More specifically, you'll have to pay an additional 2% on top of the standard rates. Here's what to expect.

Property price	Stamp duty rate⁶
Up to 250,000 GBP	2%
250,001 GBP - 925,000 GBP	7%
925,001 GBP - 1.5 million GBP	12%
Over 1.5 million GBP	14%

This is a tiered system, so you'll only pay the higher rate on the portion of the price that falls within each band. For example, if you buy a property for 300,000 GBP, you'll pay 2% on the first 250,000 GBP and 7% on the remaining 50,000 GBP.

If you’re trying to arrange your home purchase before moving to the UK, you might find paying fees and incidental costs difficult unless you’ve already opened a local UK bank account.

Even then, if your main account is outside of the UK, and you need to send money to yourself from abroad to pay fees, then it’s important to check what you’ll be charged when you make an international money transfer.

You’ll probably find that your home bank won’t offer you the best deal. Even if they claim to offer fee-free transfers, you can be sure that their cut will be rolled up into a poor exchange rate.

Buying property abroad? Send money the hassle-free way with Wise

Now that we covered some of the basics, the only question left is: how to send money to pay for your property overseas?

Wise offers you a quick, secure and transparent way of sending money to the UK. You get the mid-market exchange rate for your payments and see how much it’s charged for the transfer before sending the money from your bank.

With the Wise Account you can also hold 40+ currencies, spend money in 150+ countries, and receive like a local in 9 different currencies.

Get started with Wise

Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up to date pricing and fee information

Things to consider before applying for a UK mortgage

Here are a few things to keep in mind as you're researching different properties and mortgage options as a foreigner in the UK.

• Save for a big deposit: Lenders see foreign buyers with larger down payments as lower risk, so try to save as much as you can - ideally, over 25% or even 30%

• Start building your UK credit history: Open a UK bank account and establish a credit history through regular bills, phone contracts, and utilities

• Calculate all costs: Factor in additional expenses like higher stamp duty for foreign buyers, legal fees, surveyor costs, and other costs

• Demonstrate UK connections: Show lenders your commitment to living in the UK with things like employment contracts or your rental history. The longer you plan to stay in the UK, the more comfortable lenders will be with your application

• Get professional help: It can be helpful to work with a mortgage broker who specializes in UK mortgages for foreigners

What documents are required to get a mortgage in the UK?

The exact paperwork you'll need will depend on the bank you use. However, you can expect to be asked for the following:

• Copies of your personal identification documents (passport)
• Proof of legal residence in the UK
• Documents to prove you're creditworthy (a credit check, bank statements, proof of your wages, your P60 benefits statement, or a letter from your employer)
• Documents to prove the affordability of the mortgage (household cash flow statements, utility bills, or bank statements)

Lenders will likely want to look at your credit record, so it's important to start building a UK credit history as soon as you arrive. You should open a UK bank account and set up regular bill payments.

All of these documents should be provided to the bank to get a mortgage in principle, which means that they agree on how much they'll lend you if you find a suitable property.

Once you have an offer accepted on a home, you’ll have to hand over more paperwork, such as a property valuation and survey to prove it’s priced fairly.

How to apply for a mortgage in the UK: step-by-step

Here's what you need to do to get a UK mortgage as a foreign buyer:

Step 1. Prepare your finances

Focus on saving for your down payment - foreign buyers typically need 25-40% of the property value.¹ You should also start building your UK credit history.

Step 2. Organize documents

Gather all required paperwork, such as your passport, bank statements, proof of income, etc. Foreign buyers face extra scrutiny, so having additional supporting documents won't hurt.

Step 3. Find a mortgage broker or research different banks

Look for a broker who specializes in mortgages for foreign nationals or get in touch with banks directly.

Step 4. Get your Agreement in Principle

This initial agreement shows how much a lender might be willing to offer you.

Step 5. Find your property

Now that you know your budget, start looking for properties and make an offer once you find the right one.

Step 6. Apply for your UK mortgage

Submit your complete application with all supporting documents to your chosen lender. You'll pay the application fees and wait for approval.

How long does it take to get a mortgage approval in the UK?

The full process of buying property in the UK, from starting your search to completing the transaction, takes 6 months on average.⁷

The mortgage process itself has different timelines. It usually takes 24-48 hours to get your Agreement in Principle and up to 2 weeks for the full mortgage application review.⁷

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UK mortgages for foreigners are possible, but there are things to consider and you'll need a hefty down payment. It helps to have strong ties to the UK and a good credit history.

For a smooth mortgage payment process, send money to the UK and spend like a local with Wise.

Sources

1. MoneySavingGuru - Can foreigners get a mortgage in the UK?
2. Home Owners Alliance - Mortgage fees and costs
3. Money Saving Expert - What mortgage fees will you pay?
4. John D. Wood & Co - How much does a house valuation cost?
5. Unbiased - How much does a mortgage broker charge?
6. Baron & Cabot - UK stamp duty for non-residents
7. HSBC - Timeline for buying a home

Sources checked 12.20.2024