Overseas property mortgage: explained

Gabriela Peratello

There are plenty of reasons you might choose to buy a house overseas. You could be looking for a new home to let you live and work abroad, buying a perfect vacation property, or diversifying your investment portfolio with international real estate.

No matter why you’re interested in buying an international property, you’ll need to figure out how to pay for it — and that could mean getting a foreign property loan. This guide runs through some key pointers on how to get a mortgage for an overseas property, and some alternatives you may also like to consider.

📑 Table of Contents

We’ll also touch on how you can save on the costs of currency exchange when you send money overseas with Wise. Let’s get started.

Learn more about Wise

How can you finance your overseas property?

Getting a foreign property mortgage is one way to secure your new home overseas. But it’s not the only option.

Depending on the situation you may find that getting a mortgage for your property abroad is trickier than you expect — but there are some other ways you can finance the purchase. Here are some of the most popular option:.

Bank financing

Getting a mortgage or home loan from a bank in the US may seem like an obvious option when buying a property overseas — but it’s not always possible with mainstream banks. You may need to select a bank with a specific international operation rather than rely on your normal provider.

  • International mortgages are not available from many regular banks
  • Interest and deposit requirements vary widely between provider and can change according to the country you’re buying in
  • Large multinational banks do often offer specific international services including mortgage products, but the costs may be higher than for a domestic home loan

Read more about where to get an international mortgage with this handy guide

HELOC/Home Equity

HELOC — Home Equity Line of Credit — can be an option for people who already own a property in the US. Your bank may be willing to allow you to release equity in your US property through a HELOC plan — and you could then use these funds to buy your new home abroad.

  • Can be a fairly rapid way to access the funds you need to buy overseas
  • Your US mortgage repayments are likely to increase
  • If the value of your US property falls dramatically, you may end up owing more than it’s worth

Seller financing

Seller financing involves agreeing terms with the seller of the property to allow you to pay for it over a period of time. You won’t become the full owner until the amount is paid in full, and you’ll need to negotiate terms which work for both you and the seller.

  • Seller financing is a less common option in many parts of the world
  • Terms and rates will depend entirely on what you can agree with the seller
  • Make sure you have adequate legal protections in place before going ahead with seller financing

Developer financing

If you’re buying a property off plan through a developer you may find that financing plans are available through the developer itself. These can work in different ways, often involving staged payments made when the development hits agreed milestones.

  • Spread the cost of the purchase over time
  • Don’t part with your money until you can see the development progressing
  • Financing terms vary widely so check all the details carefully

Use retirement accounts

If you have a self-directed IRA you may be able to use the funds in it to invest in an international real estate purchase. That’s because, unlike traditional IRAs, self directed IRA products often allow investments in a broader range of assets. However, the rules around what you can and can not then do with the property from a tax perspective are complex — get professional advice to make sure you stay on the right side of the law.

  • For investment purchases only
  • You will not be able to live in or vacation in the property until you’re of retirement age
  • Get professional tax advice before making a decision to use your self directed IRA to fund an investment property overseas

Pay in cash

Paying the full value of your new property upfront may be an option worth considering if you have the funds available. However, it’s only recommended when buying a pre-existing property. If you’re buying off plan, paying upfront in cash is a risky option. If the developer runs into difficulties — or turns out to be fraudulent — you could lose out.

  • You may get a better deal from the seller
  • You may be able to close on your new home faster
  • Not a good option when buying from unfinished developments

Get a mortgage from an overseas bank

A final option is to get a mortgage from a bank in the country you’re planning to buy in. How feasible — and how attractive — this will be depends on the specific county, your residence situation and local bank practices. It’s common to find that although a bank may theoretically offer mortgages for foreign buyers, there are practical challenges.

  • Interest rates and eligibility requirements vary widely by location
  • You may struggle if you don’t have a local credit history in the country
  • Exchange rate markups and fluctuations can increase the costs if you’re paying your mortgage in a foreign currency

Paying for your mortgage abroad? Try Wise

Buying a property overseas can be a great investment. But if you’re paying a mortgage in a foreign currency, you’ll need to make sure you get the best possible deal on international transfers to make the most of your money.

Check out Wise for fast, secure and fairly priced cross-border transfers. You get the real exchange rate every time, with just low, transparent fees — which can mean you pay far less with Wise than you would with your regular bank.

💰 Create a free Wise account in minutes

Things to consider when buying a house overseas

Don’t forget — when buying international real estate it’s not just the cost of the property you’ll need to budget for. The full cost of buying a house overseas can also include:

  • Additional local charges and taxes payable at the time of purchase
  • Additional local ongoing property charges, rates and taxes
  • Currency exchange markups and price changes caused by fluctuating rates
  • Notary, registration and legal fees
  • Real estate agency commission
  • Maintenance and any required security if you won’t be there year round

Real estate practices in different countries

Buying a property overseas is unlikely to work exactly the same way as a domestic purchase would. Real estate practises, rules and relevant laws vary widely by location. You’ll need to read up on the details for your preferred country — here are a few highlights to give you a flavor.

AustraliaForeign buyers may need government approval unless they’re buying a vacant lot
BelizeNo restrictions on foreigners buying property — although foreign buyers have fallen victims to fraudsters. Learn more about buying property in Belize here.
JapanForeigners can buy property — but laws are being considered to ban purchases near strategic assets¹. Foreigners may need to report their purchase under the Foreign Exchange and Control Act. Learn more about buying a property in Japan here.
PortugalBuyers who live in the country for 5 years or more may be able to apply for citizenship through their investment
SingaporeLong term Permanent Residents may be able to buy condos and apartments, buying land or freeholds is not usually possible

How do you buy a house internationally?

Buying a home in another country can be complicated — and the processes vary widely between locations. Get professional advice from a real estate agent and attorney in the country you’re interested in to learn more.

Can a foreigner get a mortgage in the US?

There’s no legal reason stopping a foreigner getting a US mortgage. However in practice, this is much easier to do if you have a Green Card and a decent credit history in the US.

Banks make their decisions about who to lend to based on a number of factors including creditworthiness — with only a limited credit history locally, foreigners may struggle to persuade a bank they’re a safe bet.

How do you get a mortgage with foreign income?

Depending on your situation, banks may consider foreign income when assessing creditworthiness and affordability for a mortgage. However, bank policies vary, so you’ll probably need to shop around to find the right one for you.

Are you able to get a mortgage from abroad?

Getting a mortgage from another country may be a possibility — but there are often practical challenges. How this works for you will depend on where you’re buying a property, and often on your residence status. Banks are usually happier to lend to customers with high deposit amounts and high incomes — but you’ll still typically need to have a good local credit score to be considered.

Can a US citizen living abroad get a mortgage in America?

US banks set their own policies on who can be issued a mortgage or home loan. Often these include residency requirements, which means you’ll need to live in the US to qualify. However, international services for US citizens abroad are available from major global bank chains.

Doing some research into the different local and international mortgage options is the best way to find the right deal for you.

Sending money overseas to cover your international real estate costs? Check out Wise to see how much you can save

Getting a mortgage or home loan in the US for an international property is possible — but not always easy. Most people buying a home overseas will need to consider a range of payment options including mortgages with local and international lenders, as well as different approaches for financing like HELOC or developer financing.

By shopping around and comparing a range of options, providers and strategies, you’ll find the right fit for you. And don’t forget, when you’re sending money overseas, you can save with Wise. Get the real exchange rate every time — no hidden fees, and no hassles.

🚀 Save up to 6x on
international payments

Read further


  1. Nikkei - Japan restricts land deals near strategic assets

Source checked on 11.18.2021

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

Money for here, there and everywhere

Find out more

Tips, news and updates for your location