UK foreign national mortgage lending has just gone through a big change, and this change comes at the hands of mortgage lender Santander. Historically being a foreign national and getting a mortgage in the UK has sometimes been a tricky feat due to things like right to permanently reside in the UK, income received and currency of salary, and also credit history in the UK. Even with all of those satisfied, many UK mortgage lenders will restrict their lending due to the risk factor of lending to someone who isn’t a UK national. However, recent criteria updates from Santander have seemingly made the process of getting a UK foreign national mortgage a whole lot more simple. In this article, I will run through the new changes and why they might be beneficially for foreign nationals purchasing property in the UK.
UK Foreign National Mortgage Changes From Santander
At the beginning of this week Santander sent a communication out to all mortgage brokers in the UK to update them all on their newly crafted criteria policy for foreign nationals purchasing a property in the UK. As a whole of market mortgage broker, we at Oportfolio were on the receiving end of this email. In the message, Santander not only loosened some of their more strict criteria, but also completely removed some of the long-standing stipulations that they had when lending to foreign nationals in the UK. Here is a breakdown of what their new changes are:
- Where any applicant is a UK National or Foreign National with Indefinite Leave to Remain (ILR), Standard lending criteria applies, up to 95% LTV. Visa evidence will still be required for all Foreign National customers.
- Any application(s) that does not fit the above criteria, the following new criteria will apply:
- Applicant(s) has an ‘acceptable’ visa type
- Max LTV increased from 75% to 85%
- Applicant(s) has lived in the UK for at least 12 months, OR Applicant has a minimum income of £75,000 per annum or a joint income of £100,000 per annum (excluding variable income)
- There is no longer a requirement for a Foreign National without ILR to have 1 year remaining on their visa (as long as they have an ‘acceptable’ visa type)
- Santander will now accept debt consolidation applications (subject to our Standard lending criteria).
What Do These Changes To UK Foreign National Mortgage Applications Mean?
Let’s go through these changes and see what they actually mean for foreign nationals purchasing in the UK.
- The first criteria update essentially means that as long as you have UK nationality or indefinite leave to remain, then standard Santander mortgage criteria will apply to everyone. If you do not have either of these, then you will need to provide Santander with visa evidence at application stage.
- In the second criteria update, Santander has said that if the above criteria is not satisfied, then you will need to meet some other criteria. Firstly, you must have an acceptable visa. This means working visa, spousal visa or something where you are allowed to spend long periods of time in the UK will be acceptable. Anything like a holiday visa where you must return to your country shortly, will not be accepted.
- In their third criteria update, Santander have made it much easier for foreign nationals in terms of deposits. Previously Santander required you to put down a minimum of 25% deposit on a property. This has now changed to 15%. So for example, if you were buying a £200,000 property, you would need to put down £30,000 instead of £50,000.
- Santander has also said that any foreign national living in the UK without ILR must have a minimum of 12 months history in the UK, or earn £75,000 on their own or £100,000 jointly. This is a great change to their criteria as it means that you can be in the UK for less time before purchasing your first home.
Speak To A Mortgage Advisor
Purchasing a property in the UK as a foreign national has become a lot more easier thanks to the new changes from Santander. If you or anyone you know meets the above criteria and is looking to purchase their first home in the UK (Not a rental property), then please feel free to give our team a call. We are more than happy to help.
