In a move set to significantly benefit expats and foreign nationals looking to invest in the UK property market – particularly from the US – a prominent high street bank is making substantial improvements to its mortgage criteria.
The upcoming changes, expected to be announced by the end of this month, are poised to make borrowing for UK property much more accessible and affordable for those earning in US dollars.
The key updates include:
- Reduced Haircut on USD Income: The bank is reducing the haircut on US dollar (USD) income from 20% to just 10%. This means that a higher proportion of an applicant’s USD-denominated income will be factored into the mortgage calculations, allowing for a greater borrowing capacity.
- Increased Loan-to-Value (LTV) for Foreign Nationals: The bank is increasing the maximum LTV for foreign national mortgage applicants residing in the UK from the previous limit of 80% up to 85%. This higher LTV will require a smaller deposit, making it easier for foreign nationals to purchase UK properties.
These changes are particularly beneficial for individuals with a company or source of income outside the UK, such as the US, who are looking to invest in UK real estate. The reduced haircut on USD income mortgages and the increased LTV ratio effectively make borrowing more accessible and affordable for this demographic.
“These updates from the high street bank represent a significant step forward in the expat and foreign national mortgage market,” Luther yeates, Head of Mortgages at UK Expat Mortgage. “By reducing the income haircut and increasing the LTV, they are opening the door for more expats and foreign nationals to achieve their UK property investment goals.”