Getting A Mortgage
For An Overseas Property

If you require a mortgage for an overseas property this can be a complex process. The rules and regulations differ in every country and you'll need to get expert advice in this area.

The agent you are buying your property from will invariably recommend a lender but do consider they may be getting a big commission. Other agents may arrange a mortgage for you but may charge a fee for doing so. It is usually a good idea to find your own lender to fund your overseas property. Find a company with a good track record or from a personal recommendation.

If you're considering buying off-plan the developer may include a special mortgage deal, but be sure to get it checked out thoroughly before signing.

How Much Can I Borrow?

This will depend on your existing liabilities. Typically, your outgoings such as rent, debts and monthly bills, including your foreign mortgage repayments, should not exceed 40% of your net income. It is not worth getting in 'over your head' just for the sake of investing abroad. But if you take good advice and find a good deal for your overseas mortgage your return on investment can make it all worthwhile.

In some cases you will get a better deal if you borrow from an overseas lender. In others you should use a UK lender specialising in mortgages for overseas investment, but bear in mind the interest rate will usually be higher than UK rates.

The size of the deposit required to secure the property also differs country to country and you may need to form a company before you can buy your chosen property. As we said, it can be quite complicated so do get expert advice from someone who knows the area you are buying.

If you have to transfer money to, or from abroad to fund an overseas property you'll need the services of a currency exchange service. If you need this service do check closely the exchange rates on offer; when you are transfering large amounts of money it can become a costly business.

Keep in mind your reasons for buying a house abroad to ensure you're going to meet your original objectives.