Do you dream of buying a property abroad? You might long for a holiday home in the sun or an investment for the future. You may want to relocate permanently. Whatever the reason, unless you can cover the purchase with cash, you’ll need an overseas mortgage to buy property abroad.
If you’re a UK resident looking to buy property abroad, there are two types of overseas mortgages to choose from:
- An overseas mortgage with a bank in the UK
- A mortgage from a lender in the country where you plan to buy
In this guide for UK residents, we’ll take a look at both of these options, along with why some buyers choose to remortgage a property they already own to cover the costs of an overseas purchase. As with any mortgage consideration, there’s also lots to consider, including complex rules around deposits, fees and tax, which differ from country to country.
If that all sounds a bit daunting, it doesn’t have to be. Our first tip is not to let any of it put you off. Buying a property abroad is an exciting and life-changing adventure, and in this guide, we’ll outline the process in easy, jargon-free steps
How to finance an overseas property
Finding a property abroad
The first step in securing a mortgage to buy property abroad is, of course, finding the right property. You can start your search through:
● UK estate agents
● Estate agents in the country where you want to buy a property
● Live events that help UK residents find and buy property abroad. These property exhibitions let visitors browse thousands of potential homes
You may know exactly where you want your home to be, or you might still be searching for the perfect location. Either way, you should study local market trends so you can make an informed decision, just as you would in the UK.
Local house price inflation, interest rates in your target country and new developments in the surrounding area (shopping centres, entertainment venues and so on) are all worth keeping an eye on. After all, you don’t want to end up paying over the odds – or missing out on a bargain.
Work with a reputable local agent and visit any home you’re interested in to make sure the price is fair and the property fits your needs.
Can I get a mortgage for a property abroad as a UK resident?
Yes, it’s possible to apply for a mortgage on an overseas property as a UK citizen through a UK bank or an international bank with a presence in the UK, or through an overseas lender in the country you want to buy the property in.1
Like in the UK, you’ll need to show:
- Proof of address
- Evidence that your income is enough to cover the mortgage repayments, which might include proof of employment and bank statements showing salary deposits
- If you’re using savings or pension income to finance the property, you might also need to show evidence of this income
- Lenders may also ask for information on the property people are looking to purchase, to allow them to do their own risk assessment based on factors like the area where you’re buying and the value of your property
The lender will make an affordability assessment, comparing your income and outgoings. You’ll also need funds for a deposit, which can be higher for foreign buyers.
There are two ways to go about getting an overseas mortgage:
UK mortgages for overseas properties
When it comes to getting a mortgage for an overseas property, you may prefer to work with a lender you know. When you’re borrowing large sums of money, you want to feel comfortable with the people you’re borrowing it from
A number of major banks with a presence in the UK offer international mortgage services, usually for countries where they have an office. You’ll need to check that your chosen destination is covered, but several UK lenders cover popular overseas property markets like Spain, Portugal and France.
There are a number of benefits to borrowing in the UK for property purchases abroad:
● You can arrange the mortgage in English and avoid translation issues (and costs)
● A UK bank will have easy access to your credit history, simplifying the process
● A positive credit score can make it easier to secure a mortgage
The same eligibility criteria will apply. A lender will want proof that you can cover your monthly mortgage repayments, taking into account your income and outgoings.
What happens to my UK mortgage if I move abroad?
Your UK mortgage will most likely remain in place, but you must inform the lender that you have moved abroad. You may also need to get “consent to let” if you intend to rent the property out or switch to a buy-to-let mortgage.
Overseas mortgages from foreign banks
You can also opt to borrow from a bank in the country you’re buying a property in. The main advantage of this is a broader range of mortgage options and the possibility of a cheaper deal, especially if interest rates are lower there than in the UK.2
Using a local mortgage broker with specialist knowledge of the market and a contact book of local estate agents and property lawyers can also be beneficial.
On the flipside, foreign brokers aren’t covered by the UK’s Financial Conduct Authority (FCA), so you’re unlikely to be compensated for poor advice.
Using your savings to finance an overseas property
If you’re in the position to use savings to finance an overseas property, you may not need a mortgage for your overseas property at all. That means you have none of the hassle of trying to arrange a mortgage to buy property abroad, and no interest to pay. You may even have an edge over other buyers if the seller wants a quick sale.2
It’s essential to consider that your savings will need to cover the costs of all related expenses, such as taxes, legal fees, and insurance costs.2
Can you use a UK salary, pension, or investments for mortgage approval?
Yes, you can use the income you receive from a UK salary, pension or investments to qualify for an overseas mortgage. As with any mortgage, the lender will want to see proof that your finances are stable and you can afford monthly mortgage repayments.2
Can you get buy-to-let mortgages abroad?
Many buyers purchase overseas property as an investment, renting it out to holiday makers or permanent residents.
Different countries have different rules around renting out property abroad, so you should speak to a local specialist as early as possible.
The main difference with a buy-to-let mortgage is around affordability. Lenders will want evidence that the money you make from renting the property not only covers the cost of the mortgage, but will also cover periods when the property might be unoccupied.3
In practice, that means lenders will insist that the rental yield is significantly higher than the monthly mortgage repayments.3
Using remortgaging to finance an overseas property
If you already own a property, you might be able to use the equity you’ve built up in it for buying overseas. Simply put, ‘equity’ is how much money you’d be left with if you sold your property and paid off any remaining mortgage.
Remortgaging is a way of releasing that equity to raise funds for an overseas purchase. By doing so, you increase the size of your mortgage and monthly repayments, so you need to be sure you can afford it. On the upside, you may avoid the need for a mortgage for a property overseas altogether, which can result in significant savings.
Remember that house prices can fall as well as rise. If the value of your house were to fall sharply and you remortgaged the property to release funds, you may be left in negative equity. This means the loan you’ve taken out is more than the value of your home.
Is releasing equity a good option? It can be if you’ve paid off a lot (or all) of your existing mortgage and your finances are sound, but it isn’t for everyone. Take professional advice from an independent FCA-registered mortgage broker before making a decision.
Deposits on overseas property
The deposit required might be higher when buying abroad compared to buying in the UK, reflecting what lenders might see as increased risk.1
If you’re planning to buy property abroad, here are a few useful steps to make sure you can plan for your deposit requirements:
1. Compare UK and local mortgage options: Some countries allow non-residents to apply for a mortgage, but the terms and deposit requirements can vary widely. Local banks, international lenders, and specialist expat mortgage providers may all offer different rates and conditions.
2. Speak to an international mortgage broker: These professionals can guide you through the local market, explain your borrowing options as a UK resident, and help you navigate unfamiliar legal and financial systems.
Fees and legal considerations
Mortgages aren’t the only thing to consider when buying overseas. Make sure you understand the additional fees, taxes and legal implications for the country you want to buy property in to avoid any nasty surprises. Here are the key things to consider:
Fees
If you’ve bought a property in the UK, you’ll be familiar with a lot of the fees associated with buying overseas, but not all. Depending on where you buy, fees may include legal fees, stamp duty (or transfer tax), survey costs, notary costs, translation fees and mortgage arrangement fees. There may also be ongoing community fees for the upkeep of shared grounds and facilities if your property is part of a larger development.
Legal implications
Wherever you’re buying overseas, seek independent legal advice at the start of the process. Use an English-speaking property lawyer with no connection to the estate agent or developer. Research relevant local laws yourself so you know what to expect. Remember, you may need a visa, especially if you plan to live permanently in your new property, rather than just visiting from time to time.
Tax
Taxes may include an annual property tax and a tax if you sell the property. If you rent out a property abroad, you’ll need to pay tax on the rental income in the UK. Once again, the best advice is to seek professional advice as early as you can.
Lumon: Helping you manage an overseas mortgage with ease
Buying property abroad often means securing a mortgage in a foreign currency, which brings its own set of financial considerations. At Lumon, we help take the complexity out of international payments so that you can focus on your new home, not the exchange rate.
Whether you’re paying a deposit, covering monthly repayments, or managing ongoing property costs, we’re here to help streamline the process so you can move your funds at a bank-beating exchange rate.
Here’s how we support you through your overseas mortgage journey:
- Set up regular mortgage repayments with ease: You can automate your monthly mortgage payments using our Regular Payment Plan. Your funds will arrive on time, every time, without the need for manual transfers or chasing deadlines.*
- Stay in control with your online account: Prefer to manage payments yourself? Our secure online platform lets you send money abroad when it suits you.
- Get personal support from a currency specialist: Your dedicated Lumon currency specialist is here to guide you through the process. From discussing timing and strategy to sharing real-time market insights, we help you make well-informed decisions at every stage of your international property journey.
In addition, borrowing in a foreign currency means that exchange rate fluctuations could impact your repayments. That might be to your advantage, but it might not. Exchange rates change all the time, meaning that you may get more or less in a foreign currency for every UK pound.
*Please note that terms and conditions apply. Speak to a member of our team to enquire about your eligibility to set up an RPP.
Sources used:
- HSBC – Getting an overseas mortgage
- HSBC – How to finance an overseas mortgage
- Expat mortgages UK – How Rental Income Affects Your Expat Buy-to-Let Mortgage Application
Sources last checked on date: 19/06/2025
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Lumon or its subsidiaries, and it is not intended as a substitute for obtaining advice from the relevant professional services. We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
