Published 12 October 2020 · Last reviewed 26 September 2023 · Older article — see current rates
Personal names and Limited Company Buy To Let Mortgage for Foreign Nationals
In this article, I explore the options for foreign national buy to let mortgages.
The text is aimed at mortgage applicants who live and work in the UK but are on visas/residency permits.
I am a professional Mortgage Broker who has been arranging foreign national buy to let mortgages for applicants on visas for over a decade. I was also born in a different country so appreciate the problems that surround foreign nationals applying for mortgages here in the UK.
Let’s begin with the good news: foreign national buy to let mortgages are available but certain qualifying rules are required and I will run through these in a broad and general context – and I would strongly recommend you speak to a professional mortgage broker and tax advisor about your individual circumstances before attempting to a secure a mortgage.
DEPOSIT
It should come as a surprise to learn that with foreign national buy to let mortgages you will need at least a 25% deposit as generally mortgages outside of the UK in your country of origin would be the same. Generally, this is where the UK buy to let market sits anyway so you are not being disadvantaged by being a foreign national.
Unlike residential purchases, you cannot purchase a buy to let in conjunction under a subsidised scheme to reduce the size of deposit such as Help to Buy or Shared Ownership.
Deposits from abroad will require a full audit trail. Money exchange bureaus need careful thought as do gifts.
INTEREST RATES
These can be ultra-competitive as one of the lenders that offer foreign national buy to let mortgages is a major high street bank and there is no loading for applicants on visas.
TYPES OF ACCEPTABLE VISAS
Foreign national buy to let mortgages are open to Tier 1, Tier 2, Ancestral, and Spousal Visas. If you have a different Visa you will need to talk this through with your professional Mortgage Advisor but as a general rule, it must allow you the opportunity to work full time in the UK.
LENGTH OF VISA
The minimum time working in the UK before you can apply is 1 year but some Mortgage Lenders insist on 3 years here.
CREDIT IMPRINT IN THE UK
Your chances of success rely heavily on your credit imprint in the UK.
It is highly likely that you will need to have a current mortgage on a residential property and be an owner for a number of months.
Also, any major credit issues such as defaults, CCJs and arrangements to pay reduced premiums with creditors are almost impossible to get approved unless they are very small and historic.
AFFORDABILITY ASSESSMENT
The income check for foreign national buy to let mortgages is two-prong: earned income and rental coverage.
The Mortgage Lenders typically want you to be earning at least £25,000 and apply a rental coverage of typically 145% at 5.5%. Better rental calculations will apply for long term fixed rates and basic rate taxpayers.
OWNERSHIP
The foreign national buy-to-let mortgages can be bought in personal names or under a limited company.
All mortgage applicants can be foreign nationals or you can have a mixture of foreign national and applicants with permanent rights to reside.
In personal names, the applicant number is limited to 4 applicants on one mortgage. In limited companies, this could be greater and could include shareholders as well as directors.