Published 25 September 2023 · Last reviewed 26 September 2023 · Older article — see current rates
Are you a foreign national looking for mortgage advice in the UK? Learn more about visa mortgages and how to secure a Mortgage with only a 5% deposit.
5% deposit Mortgages with Visas for foreign nationals living and buying in the UK are a real possibility but you will typically need to meet higher benchmarks and stricter requirements than a British citizen would.
In this article, I discuss the current position on 5% deposit Mortgages with Visas for foreign nationals and as a result, can become a UK homeowner quicker as the savings threshold is small and may allow you to buy a bigger property than you thought was attainable.
The good UK Mortgage Brokers, such as Niche Advice, can access the whole of the intermediary mortgage market as a result they can select all the Mortgage Lenders that support 5% deposit Mortgages with Visas for foreign nationals. Below I layout some of the options and explain how they might benefit you.
Time in the UK
If all the Mortgage Applicants have been in the UK for five consecutive years it’s a straight tick in the box and 5% deposit Mortgages with Visas for foreign nationals.
There are in theory options that enable you to obtain a 5% deposit Mortgage with Visas for foreign nationals if you have just arrived but you would need to meet other stipulations. And, from my vast experience of foreign national mortgages, you will need at least 6 months of active UK credit, typically a bank account and credit card running here.
Earnings level
If the combined earnings exceed £100,000 per annum then it’s another golden ticket to qualification for 5% deposit Mortgages with Visas for foreign nationals. For employed mortgage applicants the metric is based on overtime, bonus and commission. For self-employed it’s on the latest year’s income. As I say the important word here is “combined”, so for example in the case of a married couple buying together, the Wife could be on £65,000 and the Husband £35,000 as long as the total hits £100,000 threshold.
Buying with a British Citizen
Another acceptable way of reaching for 5% deposit Mortgages with Visas for foreign nationals is to buy and live with someone who is British. In this instance the Mortgage Lender in question simply ignores altogether the fact there is a Visa for one of the applicants and applies their standard rules. Income is taken from both applicants, and the main earner can be more money than the British National.
Buying with someone with Indefinite Rights to Reside
In exactly the same way as above if one Mortgage Applicant has been granted indefinite leave to remain in the UK then 5% deposit Mortgages can include the one foreign national Mortgage Applicant.
Income not needed
If the second Mortgage Applicant is the only foreign national, and their income is not needed for the affordability assessment, there are a string of Mortgage Lenders who will allow them to be a party to the mortgage application up to their maximum loan-to-value including those who offer 95% mortgages i.e. 5% deposits.
Gifted deposits
If you haven’t got the full deposit yourself have you considered a gift from family and friends? There are Mortgage Lenders that will allow this. The options increase if the money is from a UK source and immediate family.
Builders Deposit
It is common for Mortgage Lenders to consider a 5% deposit coming from Builders of newly built property. This could effectively mean you do NOT have to contribute a deposit at all provided you meet certain foreign national rules. It also can suck in more mortgage options as when combined with your own 5% deposit you can access Mortgage Lenders that only lend to foreign nationals if the 10% deposit goes down.
Frequently asked questions:
Q) What does 5% deposit mean?
A) This is your contribution that you are putting at stake. The greater you put down the more receptive the Mortgage Lender will be as if the mortgage goes bad they have room to sell to recover the finance they are granting. On a £100,000 purchase, 5% would be £5,000.
Q) Does the type of Visa matter?
A) There are mortgage solutions for Tier 1, Tier 2, Tier 4, Student Visa, Refugee Visa, Family Dependent, Spousal Dependant, etc. Your specific Visa should be discussed with a professional Mortgage Adviser who a specialist in the foreign mortgage field, such as Niche Advice.
Q) Does the country you come from matter?
A) It will not prevent you from applying for a Mortgage but if you have emigrated from a High Risk or Sanctioned country there are likely to be greater checks by the Mortgage Lenders.
Q) Can I get a Mortgage without a deposit?
A) No, someone will have to contribute a minimum of 5%: either you; a gift from family or friends; or an incentive from a builder.
Q) Are the interest rates higher for foreign nationals?
A) Most Mortgage Lenders that consider foreign nationals have competitive rates and do not increase them for Visa cases. However, I would add that Mortgage prices are directly linked to the size of deposit, with 5% deposits attracting the highest rates.
Q) Are my chances of getting a Mortgage slimmer than a British National?
A) Not necessarily, it will depend on your overall circumstances and not only your Nationality. The key is there are fewer Mortgage Lenders to approach so the case needs to be presented well. That’s why it’s prudent to use a professional Mortgage Broker to represent you.