What is a residential mortgage?

A residential mortgage is a loan against the value of your home. The mortgage is paid off by monthly instalments over many years according to the plan you choose. It is not uncommon for people who have residential mortgages to change mortgage products or providers as the housing market and personal circumstances change over time.

There are a number of questions to ask yourself prior to making a decision, including:

• Should you opt for a repayment mortgage or interest only mortgage?
• Should the mortgage be provided by a bank, specialised lender or building society?
• Should the mortgage interest be based on a variable, fixed or capped rate?

Choosing the right mortgage is essential and is not always as straightforward as it may seem. Our team can help you by finding the solution that seems most appropriate for your circumstances.

UK expatriate buying in the UK

Buying a property in the UK is an appealing option for many UK expatriates, either as a potential home or as an investment. Yet there are a number of things to consider before you start looking into a mortgage that may be right for you. Most importantly, you need to decide whether the property you are looking to buy will be a home for you and your family or an investment property to let.

Residential mortgage

Expatriates looking to buy a residential property are usually considered good risks by mortgage lenders. As such you should be able to get a mortgage on a UK property on fairly similar terms as a UK resident with a good credit rating. However, some conditions apply:

• You usually can not apply for more than a 90% mortgage.
• It can be difficult to apply for a mortgage in the UK as a self-employed expatriate. However as long as you meet the income criteria and can prove so, it should be straight-forward.

Buy-to-let mortgage

UK buy to let mortgages are required for properties that you are looking to buy as an investment.

A wide range of loans are available and you should not have a problem finding a suitable expatriate mortgage policy.

You may find it helpful to speak to a tax consultant to find out more about the implications of owning and running a rental business.

You will want to ensure that the business is established on the right basis to optimise your tax position. You should be able to offset most of the expenses such as maintenance costs, letting agency fees, mortgage interest and insurance against the rental income received to calculate your profits before tax.

Onshore vs Offshore

A number of potential benefits are available whether you have your mortgage onshore or offshore. The best option for you depends on your current circumstances. A financial consultant can help you consider the alternatives in line with your requirements.

Choose a currency

It is worth considering which currency you would like to pay your mortgage in. If you get paid in UK pounds, it is more beneficial to have your expatriate mortgage in UK pounds as well. However if you get paid in another currency you might want to consider having your mortgage in that currency in order to protect your money from day-to-day changes in the currency exchange rates.

Equity release mortgage

Equity release is the process through which you can use the value of your home to receive a lump sum of cash or regular monthly installments. In all instances, your age will determine the percentage of the value of your home that can be released.

For example an older person can release a higher percentage of the value of their home than a younger person as they are not expected to live as long. There is no maximum age limit for equity release though applications are not usually granted to individuals under the age of 60.