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Last updated 14 February 2024.
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If earned income is being used to support mortgage payments, the mortgage must be repaid by the client’s 70th birthday or proposed retirement date unless pension or savings income can be evidenced.
CCJs/Defaults within the last 3 years are not acceptable.
CCJ’s/Defaults => 3 years prior to application are acceptable up to a maximum £2,500 – subject to an explanation and being cleared/satisfied 12 months prior to application.
No other adverse entries must show on credit file.
Applicants in probationary period are acceptable, providing they are in like-for-like employment with no gap in employment.
Applicants’ own deposit or gift from an immediate family member (spouse, parent, grandparent, sibling, child or grandchild) is acceptable. Evidence of the source of deposit is required.
Interest Coverage Ratio (ICR) – 125% minimum rental cover based on reference rate of 5.5% or chosen product rate + 2% (whichever is the higher of the two) for UK basic rate tax payers, or for higher rate tax payers, 145% at 5.5% or chosen product rate + 2% (whichever is the higher of the two).
For our 5-year fixed rate products, we now offer a revised stress rate as follows: 125% at product rate or 5.5% (whichever is the lowest) for UK basic rate tax payers, 145% at product rate or 5.5% (whichever is the lowest) for higher rate tax payers, and 115% at product rate or 5.5% (whichever is the lowest) for top slicing cases for applicants paid in acceptable currencies only.
For any other products considered less than 5 years, if there is a rental shortfall and your applicant is paid in an acceptable currency that's not on our Expat Country Exclusions List*, we will take a limited amount of earned income into our affordability assessment. The rental income must cover 100% at product rate + 2% as an absolute minimum, with the shortfall made up from earned income.
There are no currency restrictions on Expat BTL applications if the rental income passes the 125% at 5.5% or chosen product rate + 2% (whichever is the higher of the two) for UK basic rate tax payers, or for higher rate tax payers, 145% at 5.5%.
For like for like remortgage cases our Interest coverage ratio is product rate x 115%.
Please note the following with regards to eligibility:
*Please note, we'll accept the following currencies even though they're on our country exclusions list: Euro; Norwegian Krone; Danish Krone; Swedish Krona; Chinese Yuan Renminbi; and Australian Dollar.
We’re unable to accept any new applications from your clients who are residing in, or have financial links to the countries listed on our Expat Country Exclusions List (PDF).
If you have an expat client who doesn’t reside in, or have financial links to one of the countries listed, we’ll consider your application.
Minimum: £100,000 or product dependent
Maximum: £2,500,000 (unless otherwise stated)
£167,000
Both freehold and leasehold are acceptable for houses.
Freehold flats/maisonettes are not acceptable - leasehold only.
Flying freeholds – refer.
A Service Agent Agreement will need to be completed by your client before the expat mortgage is completed. This will confirm the name and address of somebody in England or Wales who will act as the Service Agent and who the Society can serve papers to should the borrower fall into arrears and possession proceedings need to commence.
Please note, evidence would need to be submitted to satisfy the above.
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