Whether you are looking to move abroad, buy a holiday home or make an investment, getting a mortgage for a property overseas is not as difficult as you might think.

The most popular countries for UK residents to buy are currently France, Spain, Italy, Portugal, the US and Turkey. Many overseas purchasers are looking to retire abroad, or are moving for work, but in the past few years, there has been an increasing number of first-time buyers unable to get on the UK property ladder buying overseas.

Overseas property mortgages from a UK bank

For borrowers concerned about the lack of protection provision from overseas lenders, obtaining a UK mortgage for your purchase provides the security of regulatory bodies. Surprisingly, most high street banks are geared up to offer mortgages services and advice for overseas property purchases, which can be especially reassuring for borrowers worried about dealing with a transaction in a foreign language.

It’s also worth noting that mortgaging in the UK is a simpler and smoother process since the bank has access to your domestic credit record which makes assessing your application easier. The downside is seeking out a UK bank branch when overseas to provide documentation.

Getting a mortgage from an overseas bank

You might be surprised to know that you can get a mortgage as a non-resident in over 60 international property markets. In some cases, the strength of sterling can make a loan in a foreign currency a financially sound decision.

A prudent buyer will seek the services of a specialist broker to find the most suitable mortgage. Plus they can advise on estate agents and lawyers to use in your chosen country. Finding local lenders can often result in better interest rates and a broader choice of mortgage deals, and they are better placed to advise you on the local laws governing the mortgage market.

Borrowers can choose to have a broker act on their behalf or contact local lenders to organise the mortgage. As in the UK, overseas lenders will require proof of income, identity and evidence of the deposit.

Borrowers should note that overseas brokers are not regulated by the Financial Conduct Authority and the exposure to fluctuating exchange rates which will affect mortgage repayments. Plus, deposits for overseas mortgages tend to be higher than what is needed for a UK mortgage – for example, in Spain, an overseas buyer will pay 30-40% of the property price.

Typically loan-to-value ratios are a little lower, and all mortgages are on a repayment only basis. Interest rates will vary, with European rates being similar to the UK, but in the US you can expect rates to be around 6%. Some overseas lenders will allow you to secure a mortgage that runs well into retirement, but be aware that they are quicker to repossess than UK lenders if you are unable to meet your repayments.

The bottom line

If you’re thinking about funding an overseas property purchase, as with all mortgages, do your research or have a specialist help you. Dealing with local language contracts, laws, regulations and licences can be complicated. Going through the proper channels for expert advice and guidance will make the process of buying abroad easier.