You are four thousand miles away. Your mortgage adviser should not make you feel it.
Buying a UK property from overseas is not a UK mortgage with a foreign postcode on the file. Different lenders, different rules, a thinner credit footprint, and a currency the high street would rather not look at.
You have probably been quoted already: a 60-night cap on your own house, your salary converted to sterling and cut by a fifth, 25% down. That is not what you asked for. What you asked for is a house you own, use freely, let out while you are overseas, and quite possibly retire to.
A second route does most of that, and it is frequently the cheaper one on the offer letter.
We place these cases every week, and we know which handful of lenders actually want them.
Holiday let mortgages
What is an expat holiday let mortgage?
An expat holiday let mortgage is a UK mortgage for a British national living overseas who wants to let a UK property to holidaymakers on a short term basis.
Affordability is assessed on projected letting income rather than your salary, personal use of the property is usually capped, and the pool of lenders willing to consider it is small.
And what counts as an expat?
For mortgage purposes, an expat is a British national living outside the UK, whether for work, retirement or family reasons.
That is a different thing from a foreign national living and working in the UK, who needs a different product from a different set of lenders. The distinction matters more than it sounds, because it decides which lenders can look at you at all.
If you hold a UK passport, live abroad, and want to buy in England or Wales, this page is written for you.
The question that decides everything
Before product, rate, deposit or night count, this comes first.
Is this primarily a home you will eventually live in, or primarily an income asset?
Most expats answer it in about two seconds.
They simply had not realised it was the question that determined everything downstream, because holiday letting had been presented to them as a single thing with a single set of rules.
It is not.
There are two routes, underwritten on opposite logic, and the cheaper one is frequently the one nobody showed them.
The two routes compared
| Route A Dedicated holiday let | Route B Expat residential, letting permitted | |
|---|---|---|
| Underwritten as | An investment. The rent pays the mortgage. | Your home. Letting is a permitted use, not the business case. |
| Affordability | Projected letting income, stressed | Your overseas salary, assessed in your own currency |
| Your own nights | Capped and contractual, often 30 to 60, up to 90 with the more generous societies | No fixed cap. You must intend to retain it for your own use |
| Letting income | Counted. It is the case. | Excluded from affordability entirely |
| Rate position | Expat premium plus holiday let premium | Expat premium only, on a residential baseline |
| Maximum loan to value | 75% | 85%, with maximum loan sizes tiered as the loan to value climbs |
| Deposit | 25% | From 15% |
| Company or SPV | Available | Personal name only. It is your home by definition. |
The honest trade
Route B gives up the ability to borrow against the rent, so the loan has to stand on your salary alone.
In return you get unrestricted use of your own property, a smaller deposit, and often a lower rate.
A client we placed last year makes the point better than a table does.
He was quoted on holiday let terms at 75% on a £425,000 cottage, a deposit of £106,250. He completed instead on expat residential terms at 80%, a deposit of £85,000.
That is £21,250 he did not have to find, a lower rate on the offer letter, and nobody counting his nights.
Read the case study here.
How many nights can you stay in your own UK holiday let?
Most expat holiday let lenders permit 30 to 60 nights of personal use a year, with a few societies going to 90.
| Mortgage type | Your own nights per year |
|---|---|
| Standard buy to let | None. Short lets breach the terms outright. |
| Most expat holiday let products | Around 30 to 60 |
| The more generous societies | Up to 90 |
| Expat residential with letting permitted | No fixed cap |
The cap does not care about the reason for the visit. A funeral, a wedding or a parent’s operation all count against the allowance.
For a UK based investor, 60 nights is reasonable.
A fortnight in spring, a fortnight in autumn, some long weekends. For an expat flying back from Singapore for three weeks at Christmas, plus a summer fortnight with the children, plus one trip nobody planned, the ceiling arrives fast.
That gap between an investor’s diary and an expat’s is the whole reason the question at the top of this page matters.
Why the cap exists
The underwriting case rests on the property being available to paying guests, so your own occupation is treated as a cost to the security rather than the point of the exercise.
On a dedicated holiday let product that logic holds up. It only becomes a problem when the product does not match what you actually wanted, which is more often than the market lets on.
Related: Expat holiday let mortgages: how many nights can you stay?
Why the route with more freedom is often cheaper
It sounds wrong. The mortgage that lets you use your own house whenever you like ought to cost more. Usually it costs less, and the reason is in how the rate is built up.
The expat premium
Living overseas costs something on rate regardless of what you are buying. Priced in: cross border underwriting, foreign currency income, a thinner UK credit footprint, and a smaller pool of willing lenders. Depending on whose figures you read, roughly 0.3 to 1 percentage point over the equivalent product for a UK resident.
The holiday let premium
Seasonal income is less predictable than a twelve month tenancy. Occupancy assumptions can be wrong. The resale market for a property with a letting history is narrower. That gap has closed considerably as more lenders entered the space, but it has not gone.
The stacking effect
An expat holiday let mortgage carries both layers. An expat residential mortgage carries only the first. Residential pricing also starts from a lower baseline than investment pricing before any expat loading is applied, so Route B begins from a better number and adds fewer premiums to it.
The practical effect is that the structure giving you unrestricted use is frequently the one with the lower rate. Not always, and not for everyone. But often enough that if you have been quoted only on holiday let terms, it is worth asking why.
Rate comparisons here describe general market pricing patterns rather than any specific product offer. The position between any two products should be checked at the point of enquiry.
When the dedicated holiday let route is the right one
Route B is not the answer for everyone, and we would rather say so here than after a credit search.
Here are four situations where the holiday let product is straightforwardly the right one.
You are buying it as a business
If there is no real intention to use it personally, the residential route is not available. The intention to retain it for your own use is a genuine condition, not a form of words to be worked around.
Your salary will not carry the loan alone
With letting income excluded, everything rests on your earnings. If the numbers do not reach, the holiday let route exists precisely because it lets the rent do the heavy lifting.
You want a limited company or SPV
The residential route is a personal name product by definition. Corporate structures live on the investment side of the market. See our page on limited company holiday let mortgages.
It is the first of several
Multiple properties, commercial intent, scaling up. A portfolio is investment lending and should be structured as such from the outset.
Will my income be assessed in my own currency?
With the right lender, yes.
Some assess affordability in as many as 20 currencies and ask for income and expenditure in the local currency with no percentage haircut applied.
Others convert to sterling and discount, sometimes by 20% or more. Which camp your lender falls into can shift your maximum borrowing by six figures.
The difference is structural rather than negotiable, so it comes down to lender selection:
- The common approach. Your income is converted to sterling, then reduced to absorb currency risk. You lose a fifth of your borrowing power to an exchange rate assumption.
- The better approach. Income and expenditure are declared in your own currency and assessed there, with no percentage reduction applied to foreign earnings.
Many expat lenders accept income in major currencies including USD, EUR, AED, SGD and HKD. Lists differ between lenders and are reviewed regularly, so the position should be checked when you apply.
Which countries can you apply from?
Lending is generally restricted to FATF approved jurisdictions.
Beyond that, three things matter:
- Country risk. Lenders assess where you live. A higher risk country of residence can mean stricter terms, a smaller lender pool, or no offer at all.
- Sanctions. If you live in a country under UK sanctions, a UK lender cannot lend to you.
- Change. Residency lists are reviewed regularly, so no published list, including anything on this page, is a substitute for checking at the time you apply.
Tell us where you live and we will tell you on the first call whether any lender we work with covers it.
What an expat holiday let application needs
You are likely to fit if most of the following are true:
- British citizenship, living outside the UK for work, retirement or family reasons
- Permanent employment overseas, generally with at least six months of continuous service
- Earned income outside the rental of somewhere between £20,000 and £40,000. This threshold varies more between lenders than almost anything else on the file
- A UK correspondence address, or one you can arrange. A family member’s or a solicitor’s is usually fine
- A UK bank account to service the mortgage from
- Aged between 21 and 75
- A deposit held in an identifiable account you can evidence
- Willing to appoint a UK solicitor to accept legal service, if your lender conditions it
Why expat applications get stuck
It is rarely the money. It is everything around it.
You have a strong salary and a deposit that has been sitting ready for a while.
On paper you are exactly the borrower a lender should want.
And yet the enquiries stall, the high street computer does not know what to do with a Dubai payslip, and you end up wondering whether the problem is you.
It is not.
Most lenders are built for a UK resident with a UK payslip and a UK credit history, and you have none of those three things in the shape their systems expect.
That does not make you unfundable. It makes you a specialist case, and specialist cases are placed by knowing the criteria, not by filling in more forms.
What clients tell us, and what is actually happening
| What you feel | What is actually going on |
|---|---|
| “Nobody will look at my income” | Your income is fine. Most lenders convert it to sterling and discount it. The right ones assess it in your own currency with no haircut, which is a six figure swing in borrowing power. |
| “I can never get anyone on the phone” | You are calling UK office hours from the wrong side of the planet. We work to your time zone, not ours. A nine o’clock UK call is a midnight one for us if that is what suits your clock. |
| “The paperwork keeps bouncing back” | Expat files fail on documentation far more often than on affordability. The fix is packaging the file correctly the first time, so underwriter queries are anticipated rather than discovered. |
| “I don’t know which product I even need” | Because you have probably been shown one box and told it is the only one. There are two genuinely different routes with opposite logic, and picking the wrong one costs you either rental income or your freedom to use the place. |
How we place expat holiday let cases
Four steps, one credit search.
A conversation across time zones
Twenty minutes on a call that suits your clock, not ours. Country of residence, currency, income structure, deposit source, and what you actually want the property to do.
Criteria matched before anything is submitted
We check your profile against every lender active in expat short let lending, covering personal use terms, currency treatment, residency list, minimum income and property type, so the case goes to a lender that has already said yes in principle to your shape.
Application packaged for an expat file
Overseas payslips, employment contracts, UK notice address, deposit evidence in the right format. This is where most expat cases fail, and where the real work sits.
Through to completion, and after
We chase the valuation, handle underwriter queries, and diarise your product end date so you are not discovering a reversion rate from four thousand miles away.
Who you will be dealing with
Every broker here has at least 20 years of experience. Mark Lanario, who leads our holiday let and specialist property finance work, has been advising clients since 2006.
We are whole of market, so we can place cases with lenders you cannot approach directly, and we own and invest in property ourselves. Drake Mortgages is authorised and regulated by the Financial Conduct Authority.
Next step
Tell us where you live and what you want to buy.
We will tell you honestly whether it is fundable, roughly what you can borrow, and which route fits.
No credit search, no obligation and no sales script.
If the answer is that it does not work yet, we will say so and tell you what would change it.
Frequently Asked Questions
Between 30 and 90 nights a year on most expat holiday let products, set contractually and varying by lender. The allowance is counted, and exceeding it puts you in breach of your mortgage terms rather than simply over a guideline. If you want unrestricted use of your own UK base, an expat residential mortgage with letting permitted is usually the better route.
Yes. High street banks usually decline non-UK residents, but specialist expat lenders and international building societies actively want this business. As a whole of market broker we place expat mortgages, expat buy to let and expat holiday let cases for British nationals in most countries.
It depends on what the property is for. If it is an income asset you will use occasionally, the holiday let route fits. If it is a home you will use freely and eventually live in, and your salary can carry the loan without the rent, expat residential with letting permitted is usually better and often cheaper. That is the first question we ask.
Usually a modest premium over the equivalent UK resident product, because the case is manually underwritten. The gap is smaller than most expats expect, and picking the right route matters more to your rate than your residency alone. A dedicated holiday let product carries two premiums where an expat residential product carries one.
No, for the right lender. Many expat lenders accept income in major currencies including USD, EUR, AED, SGD and HKD. What matters more than the currency itself is how the lender treats it. Some assess your income in its own currency with no reduction applied. Others convert it to sterling and discount it, which costs you borrowing power.
With the right lender, yes, and it is worth choosing on this point alone. A lender that assesses in your own currency with no haircut can approve a loan that a lender converting and discounting will decline outright on the same income. On a larger case the difference between the two approaches runs to six figures.
Lending is generally restricted to FATF approved jurisdictions, and lenders assess country risk on top of that. We cannot place cases in countries under UK sanctions. Residency lists are reviewed regularly, so tell us where you live and we will confirm on the first call whether any lender we work with covers it.
You can still buy. The lender pool is narrower than for expats who already own a residential property here, so lender selection becomes the whole game. The same case can be a straightforward offer at one society and an instant decline at another, which is why criteria matching before submission matters so much on these files.
Generally both. Lenders want a UK bank account to service the mortgage from, and a UK correspondence address for notices. The address does not have to be a property you own. A family member’s or your solicitor’s is usually acceptable, and arranging one is rarely the obstacle clients expect it to be.
Yes, on the dedicated holiday let route. Limited company and SPV ownership is offered by several expat lenders, though some exclude company structures altogether. It is not available on the expat residential route, because that product sits in your personal name by definition.
Because the checks fail before a human ever sees the file. High street lending is automated around a UK payslip, a UK credit record and a UK address, and an overseas applicant has none of the three in the format the system expects. Manual underwriting solves it, but only a small number of lenders offer that on holiday lets. Knowing which ones is most of the job.
The Financial Action Task Force sets global anti money laundering standards, and lenders use its assessments to decide which countries they will accept borrowers from. Living somewhere with weak FATF standing usually means three things: fewer lenders will look at the case at all, those that do will want more evidence of where your deposit came from, and some will decline on country of residence alone regardless of your income. What counts here is where you live, not which passport you hold.
An expat buy to let is a long term let to a tenant on a tenancy agreement, and it gives you no personal use of the property at all. Letting it to holidaymakers would breach the terms outright. A holiday let takes paying guests by the week and allows a capped number of your own nights, though usually at a higher rate. If you will never stay there yourself, buy to let is normally the cheaper of the two.
Read more: Expat Buy to Let vs Holiday Let Mortgages
Related reading
If you found this useful, our Knowledge Section covers a good number of other topics that might help with your next step.
Whether you’re looking at buy to let mortgages, want to understand holiday let mortgages in more depth, or need to know what to expect from bridging finance, we’ve written guides to walk you through each one in plain English.