Halifax will now accept non-sterling income for mortgage applications
Halifax has announced a new exciting change to its mortgage application criteria, that is due to take effect on the 12th of August 2024. In a message to all mortgage brokers this morning, Halifax announced that they will now accept foreign income mortgage applications. This expansion is expected to significantly benefit individuals earning in foreign currencies, allowing them greater access to the UK property market. Working in a London based mortgage brokerage, I have seen a lot of high flying professionals who earn income from countries outside the UK and over the years so many have been unable to get the mortgage they need due to the currency of their income. This change is not just a criteria change in my opinion…it is a complete change to the mindset of UK based mortgage lenders.
Foreign Income Mortgage Criteria For Mortgage Applications
Under the new guidelines announced today, Halifax have clarified that they will now accept incomes in five key non-sterling currencies: the US Dollar (USD), Euro (EUR), Australian Dollar (AUD), Indian Rupee (INR), and Swiss Franc (CHF). Eligible income types for both purchase and remortgage applications include basic salary, bonus, overtime, and commission.
To mitigate risks associated with currency fluctuations, Halifax will convert non-sterling income to British Pounds (GBP) and apply a “haircut”—a reduction of 20% for regular income and 10% for bonus income. This cautious approach should ensure that borrowers can manage their mortgage obligations, even if exchange rates fluctuate unfavourably.
How To Apply For A Mortgage With Foreign Income
Firstly, as we always say, you must secure a new mortgage with the help of a mortgage advisor. Especially for delicate mortgage applications like this. Mortgage advisors who wish to submit applications with non-sterling income should firstly carry out a Decision in Principle (credit check) for you to determine the maximum loan amount available to you. On Halifax’s updated income screens on their website, mortgage advisors will find a new dropdown field for currency selection. It’s important to note that the income amount should be entered in the originating non-sterling currency, rather than its GBP equivalent. So when you are talking to your broker about your income, make sure they are aware of the exact amount you are paid and the exact currency.
How Is Your Non-Sterling Income Verified By Halifax?
For income verification, if your payslips display the amount in the original currency, this will suffice. However, if the payslips only show the converted GBP figure, a compensation letter or remuneration statement will need to be provided by your employer, and should be submitted alongside the payslips to provide full transparency.
Oportfolio Mortgages – Our Opinion
My managing director at Oportfolio Mortgages Oliver Whitehead, expresses strong support for Halifax’s new initiative. “Many of our clients have good jobs with substantial earnings coming from abroad, making non-sterling income increasingly common. Halifax’s decision to include non-sterling income in their mortgage criteria is a positive step forward, offering more flexibility and opportunities for clients who previously might have struggled to secure a mortgage due to their foreign income sources,” he said. This development represents a significant opportunity for individuals earning in foreign currencies to secure a mortgage and take a step closer to homeownership in the UK.
Speak To A Mortgage Broker Today
For anyone who is looking to get a UK mortgage but your income is paid in non-sterling currency, working with a knowledgeable mortgage broker can be invaluable. At Oportfolio Mortgages, we specialise in finding the best mortgage products, rates, and deals tailored to your unique financial situation. Whether you’re earning in sterling or another currency, we’re here to help you make your homeownership dreams a reality. Give us a call or drop us a message today to speak with a qualified mortgage advisor.
