If you live and work in the UK on a visa, you may be wondering, “Can I get a mortgage in the UK without indefinite leave to remain?”. The good news is that there are plenty of UK lenders willing to accept applications from certain types of visa holders.
While a mortgage applicant with settled status is in a stronger position to be approved by lenders, it is possible to get a mortgage without ‘indefinite leave to remain’ in the UK, depending on which type of visa you hold. Most lenders impose different criteria for visa holders, so it’s wise to work with a mortgage broker to understand your options.
However, it’s important to note that criteria and lender requirements can vary greatly among lenders and depend on your circumstances. Therefore, it’s important to seek advice from a specialist broker if you fall into this category.
At Strive Mortgages, we specialise in arranging mortgages for non-UK nationals. If you’re interested in exploring your mortgage options as a foreign national, please get in touch, and one of our experienced mortgage brokers can help.
What does indefinite leave to remain (ILR) in the UK mean?
If you want to settle in the UK, then you need to apply for Indefinite Leave to Remain (ILR) status. This is also known as ‘settlement’. Once you receive ILR, you will have the permanent right to live, work, and study in the UK for as long as you like. You can then apply for British citizenship if you wish and, if you are eligible, apply for benefits.
There are various methods to apply for ILR based on your particular situation. If you or any of your family members are citizens of the EU, EEA or Switzerland, then you might be eligible to apply for a settled status under the EU Settlement Scheme instead.
How does having indefinite leave to remain affect my mortgage options?
Most lenders accept applications from individuals who do not have ILR or settled status. In most cases, they will impose more stringent criteria and requirements. For example, they may require a minimum period of residency in the UK and a larger deposit, impose maximum LTV caps or minimum income requirements.
Lenders consider many other factors apart from your residency status, including your nationality, visa type, length of time you’ve resided in the UK, your annual income, credit history your deposit.
You can expand your options even more if you’re considering a joint mortgage with a UK national or someone with settled status.
Types of visa accepted for a mortgage
Mortgage lenders typically consider most long-term visas, while it’s more challenging to find options for short-term visas like student visas or tier 5 visas. Long-term visas such as tier 1 entrepreneur and tier 2 work visas, as well as spousal visas like tier 1 marriage and tier 2 dependent, are commonly accepted by lenders.
- Tier 1 Visa: The Tier 1 visa category is designed for migrants such as entrepreneurs, investors, exceptional talent, and graduates who wish to come to the UK to work and contribute economically.
- Tier 2 Visa: The Tier 2 visa is for skilled workers who have a job offer from a UK employer and are sponsored by that employer.
- Spousal Visa: A spousal visa allows the husband, wife, or civil partner of a UK resident or British citizen to join them in the UK. This visa is meant for those in a genuine and legally recognised relationship.
For more information about visas that are accepted by mortgage lenders, check out our blog.
What is the mortgage criteria for pre-settled status applicants?
Here are a few of some of the most common factors lenders use to assess visa applicants.
Deposit: Some lenders require foreign nationals without permanent residency to have a higher deposit. For example, many mortgage lenders require a minimum 25% deposit. However, it is possible to get a mortgage with as little as 5% of the purchase price, i.e. 95% loan to value (LTV).
Time left on visa: Some lenders may require a minimum length of time left on your visa or work permit, such as 6 months at the point of application. However, the mortgage visa requirements vary among lenders. It is possible to obtain a mortgage even if you have less than 6 months left on your visa.
Residency: Certain lenders may stipulate a minimum period of residency for UK residents before they consider their applications. For instance, some lenders may require applicants to have lived in the UK for at least 2-3 years, while others may consider applicants from their moment of arrival in the UK.
Credit Score: When you apply for a mortgage, lenders will perform a credit check to evaluate your ability to meet the mortgage repayments. Although there isn’t a specific credit score threshold required to qualify for a mortgage, having a good credit history in the UK will broaden your choices and increase your chances of approval. Therefore, it’s advisable to obtain a copy of your credit report to verify your score before applying for a mortgage. Get a copy of your credit report here.
Property Usage: Your mortgage options vary depending on the intended use of the property. For example, if you are buying an investment property with a buy-to-let mortgage lenders usually require a minimum 75% loan to value (LTV) as standard, regardless of residency status.
Joint Mortgage: If you plan to apply for a mortgage with someone else, note that the other mortgage applicant must also meet the lender’s residency criteria. A joint application will open up more options and may allow you to use both incomes, which can increase affordability. For example, Natwest usually requires a minimum of 25% deposit for most non-UK nationals without settled status. But if you’re applying with a UK citizen and you have a spousal visa, they may consider as little as a 5% deposit.
How much can I borrow as a visa holder?
The amount you can borrow on a mortgage in the UK depends on other factors than your visa status, such as your income, outgoings and deposit level. Most mortgage providers generally lend between 4.5 and 5 times a borrower’s income, however, this varies considerably. Some lenders consider up to 5.5 times income, and a few lenders consider as much as 6 times income, but this is less common.
How to get a mortgage as a non-UK citizen without permanent residency
The mortgage application process for non-UK citizens is similar to any other application, however, you may often find lenders have extra checks or additional eligibility criteria for these types of applications.
The first step in the process is get establish your options and find out how much you can borrow and which lenders will consider your application. The best way to do this is to reach out to a mortgage broker like Strive, who will often have access to a wide range of lenders and will look to secure the right mortgage to suit your circumstances.
A mortgage broker will help you throughout the whole mortgage process, starting with a full assessment of your circumstances and mortgage requirements. They will check lenders’ affordability criteria, help you understand how much you can borrow and explain the mortgage options available to you. They will also let you know what interest rates are available and what your mortgage repayments might be.
The next stage is to secure an ‘agreement in principle’, which is a preliminary, non-binding confirmation from a mortgage lender indicating the amount they might be willing to lend based on a credit check. They are typically valid for 3 months.
Once you’ve got an agreement in principle, you’re ready to get out there and start viewing properties and making offers. Once you’ve had an offer accepted on a property, you will begin the process of applying for the mortgage and instructing a solicitor so the legal work can commence.
What documents are needed?
It’s important you have all your ducks in a row when applying for a mortgage to ensure everything runs smoothly and to avoid delays.
Requirements vary amongst lenders depending on your circumstances. Here’s a non-exhaustive list of documents you need to provide:
- Proof of identification and address
- Proof of Earnings – 3 months pay slips and a copy of your employment contract for employed applicants or 2 years accounts/SA302’s for self-employed applicants
- 3 months’ UK bank statements
- Proof of Deposit
- Visa documentation
Speak to Strive Mortgages, a specialist mortgage broker for UK visa holders
If you’re looking to get a mortgage in the UK but don’t have indefinite leave to remain, we can help you explore your options. Working with an independent, experienced mortgage broker like Strive will give you the best chance of success with your application and help save you time and money. We specialise in arranging mortgages for foreign nationals and are best placed to help you on your mortgage journey.
We will be on hand to help throughout the entire process, from presenting your options and making your mortgage application to assisting with your property search and the offering process. We will also help you source and liaise with solicitors, surveyors and estate agents to ensure the process runs as smoothly as possible.
Frequently asked questions about getting a mortgage without indefinite leave remain
No, it’s possible to get a mortgage in the UK without indefinite leave to remain. The options available depend on your circumstances, including the length of time you’ve spent in the UK, your deposit value, nationality and visa type.
There is no minimum score to secure a mortgage, as each lender has different thresholds. However, you will have more options available to you if you have a good credit score. If you’ve not lived in the UK long, it may take a little time to build up your credit history. It’s worth checking your credit report before applying, but be aware that excessive credit checks can damage your credit score.
Before you apply for a foreign national mortgage, there are several steps you can take to improve your chances. This includes building a good credit score, saving more of a deposit, setting up a UK bank account with direct debits, extending your visa or making a joint application. For more advice, read our blog about getting a mortgage as a Foreign National.
As an individual who resides outside of the UK, you may be wondering if UK mortgage lenders would consider your application. While it’s true that most lenders view non-UK residents as high risk, there are still some specialist lenders who are open to considering applications from overseas borrowers. Although the options are limited, it’s not impossible to secure a mortgage in the UK as a non-UK resident.