Getting a UK mortgage as a foreign national on a visa
There are many reasons why foreign nationals choose to visit the UK on a long-term basis. It could be for work, study, exploring unique business opportunities, reconnecting with family, or even love.
As contributing members of society—appropriate visa in hand—there’s nothing to stop them from taking out a mortgage to buy their own home as long as they meet the borrowing criteria of their lenders. As a foreign national, however, there are a few extra hoops to jump through, and they won’t necessarily get the same offers and options as a UK national.
Types of visas and their chances of mortgage approval
There are many visas available for visitors to the UK. Most, where the holder qualifies with the necessary lender criteria, will allow them to take out a residential mortgage in the UK.
There isn’t a one-size-fits-all application; instead, various options are available from the British Government. For a complete list, visit the ‘Work in the UK’ page, but for a quick overview, here are the main categories.
The UK work visa tier system
The UK holds a points-based tier system for its standard visas. If applicants score the minimum points required via an assessment test, they’ll qualify for their visa.
The test includes some basic personal details such as age and fluency in English but also factors relating purely to the level of the tier they’re hoping to achieve.
- Tier 1 – High-value migrants
- Tier 2 – Skilled workers
- Tier 3 – Unskilled workers
- Tier 4 – Adult students
- Tier 5 – Temporary workers
As you can see, the lower numbered the tier level, the more value the applicant brings to the country. Tier 5 visas, being temporary, are limited to 12-month periods. Some Tier 1 options have now been closed to new applications, but current holders in those categories are still likely to achieve a mortgage should they wish to apply.
UK work visas include everything from the more popular Health and Care Worker, Skilled Worker, Overseas Domestic, and Specialist Worker visas to International Sportsperson and Minister of Religion visas.
Tier 4 student visa mortgages are only available from a limited selection of lenders, so employing a mortgage broker to track them down would be the most sensible step for those applicants. A graduate route visa and mortgage is a complex situation. The Graduate Route for students on Tier 4 visas allows them to apply to look for work for an additional two or three years for PhD students. However, to qualify for a mortgage, they’ll likely have to progress to a Tier 1 or 2 visa.
UK family visa
Visas are available for those wishing to visit family in the UK and to settle here as a British citizen or settled person. This is also the visa for those becoming the partner of a British citizen or settled person through marriage or civil partnership.
EEA Family permit
This is an alternative family permit for relatives of European Economic Area of Swiss nationals or relatives of EEA nationals.
British National Overseas (BNO) visa
In 2021 the UK Government introduced new measures for BNO holders in Hong Kong. With visas catering for 30-month to 5-year terms, residency and the property market are wide open for those Asians in this category—as long as they meet the lender criteria, of course.
UK visa extension
If you’re in the UK on a work or study visa, you can apply for a legal extension to your stay.
Can you apply for a mortgage on a BRP?
A BRP—a Biometric Residence Permit—is an identity card that holds detailed data and allows holders to access certain rights in the UK. Each permit includes various data about the holder, including their name, date of birth, place of birth, and some biometric information such as a photograph and fingerprints.
A BRP also includes the immigration status of the holder and any conditions and restrictions to their stay.
The terms of a BRP define the holder’s settled or unsettled status, and any visa application associated with a permit is the likely factor that will or won’t deem them acceptable for a mortgage.
However, many BRP holders are accepted for UK mortgages as long as they meet all the necessary lender’s criteria.
Lending criteria for borrowers on a visa
As with any UK mortgage, borrowers with visas are expected to meet the specific lending criteria to achieve approval. As well as the usual affordability and credit checks, foreign nationals will need to complete additional measures, including those relevant to their visa.
Residency – How long have you lived in the UK?
You’ll be expected to have lived two years in the UK; anything less won’t have allowed you to build an appropriate credit score, have a suitable address history, and record of employment and income. Self-employed applicants will need a minimum of 3 years of accounts.
Which types of visas are accepted?
Generally, Tier 1 and 2, spousal, and ancestral visas are all accepted by mainstream mortgage providers. Specialist lenders consider other visas on a case-by-case basis or where they hold particular experience and expertise.
Don’t panic if your visa isn’t one of the major options—mortgages are available for even the least common; speak to an experienced mortgage broker to discover all your options and match your ideal lenders.
Does time left on visa affect mortgage application?
Yes. You’ll be expected to have a reasonable period left on your visa, but this can be as little as 1 to 3 years with many providers. You certainly won’t be expected to have indefinite leave to prove secure enough to achieve borrower status; however, it would definitely work in your favour if you had.
What type of deposit will a visa worker need, and what level of LTV can they achieve?
Most lenders will need higher deposit amounts, as foreign nationals are considered higher-risk loan options. The rule of thumb suggests around 20 to 25% deposits, with their associated LTV being 75 or 80%.
However, in specific cases, applicants have been known to attain a 95% LTV. The type of work, income, and eligibility criteria achieved by the borrower will dictate such preferential outcomes.
You will be expected to hold a flawless credit report
As a high-risk loan, lenders expect a clean credit report and a high credit score. This builds the confidence they need that the borrower will be a safe option when making monthly mortgage repayments. Conversely, any blemishes on their credit report will likely terminate the chances of approval, as may a too-high current debt total.
You’ll usually be expected to hold a higher minimum income requirement
Another factor that lowers the risk to lenders is the amount each applicant earns. Often, higher salaries of £75k are preferable, if not expected by some lenders.
How to get a mortgage on a UK visa
Plan your application meticulously
As with any mortgage application, ensuring you have all paperwork and documents gathered and ready for submission is a must. The more information you supply, the less you’ll have to do later. You’ll need to provide visa documentation, proof of where you live, copies of bills and financial records, bank accounts, payslips, work contracts, and anything else that will affect your affordability profile and assessment.
Fix your credit score
We can’t stress how important a strong credit report is. If you know of any issues or mistakes on yours, fix them immediately. If you think there might have problems with your credit report, speak to one of our highly experienced team. We can guide you through improving weak areas and correcting any apparent issues.
Get professional advice
Mortgage brokers are your most knowledgeable experts across the market, so it makes sense to utilise their expertise and knowledge. They’ll introduce opportunities only available to industry specialists, delivering options and deals that mainstream banks and lenders often cannot match.
Which visas aren’t acceptable for a UK mortgage application?
Most temporary visas (Tier 5 visas) will be denied mortgage approval, as a mere 12 months isn’t nearly enough to achieve the work and credit history banks and lenders need to see.
Also, refugees aren’t currently accepted for UK mortgages.
So, if you’re asking, “Can I buy a house as a visa holder in the UK?” Yes, you can; as long as you meet the lender’s criteria it shouldn’t be too much of a stretch to attain the funds to buy your own home. As far as borrowing on a visa goes, you don’t need permanent residency to get a mortgage, but having an appropriate amount of time left on your visa is essential.
If you’re working in a specific role and need some specialist information (for example, you’re interested in any options under a sole representative visa residential mortgage), we’ve got experts with all the knowledge you need.
Give us a call today, and we could have you on your way to being a UK homeowner before you know it.