Expats Ask, What Happens When My UK Mortgage Expires During Lockdown?

Written for Expat Network by Guy Stephenson of Offshoreonline

But what happens next? You could equally be facing the expiry of a permission to let, or the maturity date for a fixed or discounted loan, so you need to take action to avoid being moved automatically onto your lender’s standard variable rate, some of which are running at over 6% at present, whilst UK Base Rate is at just 0.1%. If the COVID -19 pandemic has highlighted one mortgage issue, it might be how to enquire about an expat remortgage during lockdown.

Guy Stephenson, a director of expat mortgage brokers Offshoreonline explains, “Most UK high street lenders cannot offer expat mortgages to customers living abroad – expat lending is a specialist lending field. The job of an expat mortgage broker is therefore to find lenders who can support you with the correct expat mortgage, which will also depend where you are living, while you are resident and working abroad.”

If you are a customer of one of the lenders who do offer expat mortgages, you will most likely be offered a follow-on product, so the problem is solved. But if you are a customer of one of the major high street banks such as Santander or Lloyds International, these do not currently offer expat solutions via their onshore networks. Equally HSBC and Barclay customers may be diverted to their premier or expat banking arms, where significant new financial preconditions may have to be met.

At this point, you will need to find a new UK expat mortgage, as it is unlikely you can still claim to be living in the UK.  This will become obvious to the lender too, once you start communicating from abroad from an overseas address. It is likely the lender may wish to update the data they hold on you, so they could for example, ask for an up to date bank statement and evidence you are still employed. Again, this will show you are now living as an expatriate.

Applying for an expat buy to let mortgage can be straightforward, once you have identified a lender who can help. Each lender now has their own individual underwriting, so whilst some will accept e.g. Australian residents, many will not, some will be happy to take Saudi residents, others not. If you live in an active or former warzone, the number of lenders who can help will be very small indeed. The point about expat brokers is that they should only offer loans from companies which they know can support you. Expect to be asked to prove your identity with a certified copy of your passport, prove your address with a utility bill and provide evidence you are have an income, as well as up to date statements for all loans you hold. Thereafter, the process can be fast and completed online or over the phone, with original signed documents being sent at the end.

Should you return to the UK, you can always convert your UK expat buy to let mortgage back into a main residential loan, subject to the conditions in force at the time.