If you're hoping to buy a property in the UK but are working here on a Tier 2 visa, then there’s good news: there are many lenders able to consider Tier 2 visa mortgage applicants. They just have certain caveats and criteria you have to meet and this varies from lender to lender.
Of course, these additional criteria are to compensate for the increased risk taken on by the lender, which is why you’ll likely also face higher interest fees and deposit requirements.
Here, we'll take you through everything you need to know about getting a mortgage for Tier 2 visa holders, including which lenders offer these types of mortgages, lending requirements, what kind of mortgage deposit you may need and more.
In this Guide, We Cover the Following Topics:
- What Is a Tier 2 Visa Mortgage?
- What Are the Current Mortgage Visa Requirements UK?
- Which Mortgage Lenders Offer Tier 2 Visa Mortgages?
- Are Tier 2 Visa Mortgages More Expensive?
- Are Tier 2 Visa Mortgages Available to First-Time Buyers?
- How Much Can You Borrow with a Tier 2 Visa Mortgage?
- Can You Remortgage with a Tier 2 Visa?
- Can I Get a Tier 2 Visa Mortgage with Bad Credit?
- Can You Get a Mortgage in the UK with a Visa if You Don't have Indefinite Leave to Remain?
- Can You Get a Mortgage on a Spouse Visa?
- Which Visas Are Not Accepted by Mortgage Lenders?
- Can I Get a Buy-to-Let Mortgage on a Visa?
- Tier 2 Visa Mortgage Next Steps
What Is a Tier 2 Visa Mortgage?
A Tier 2 visa mortgage is a type of mortgage available to individuals in the UK on a Tier 2 visa. Not all lenders offer Tier 2 visa mortgages but there are many that do, including high street lenders, building societies and specialist lenders. The lenders that are able to offer Tier 2 mortgages typically have stricter criteria, additional caveats and may charge higher interest rates than for standard mortgages for UK citizens. Criteria and requirements and products also vary from lender to lender.
What Are the Current Mortgage Visa Requirements UK?
Here are some examples of general lender criteria and requirements you need to meet to be eligible for a Tier 2 visa mortgage in the UK:
- You must have been permanently residing in the UK for the last 1 – 3 years
- The lender will usually require that you have a minimum of 2 years remaining on your visa
- You must provide evidence of sponsorship and residency status
- You must typically have a minimum deposit of around 20% - 25%
- The application income must meet a minimum threshold such as £50,000 - £100,000
- You may have to provide additional evidence of your income, deposit source, address history, employment and more
Bear in mind that because these mortgages are complex and the criteria varies so much between lenders, the above requirements are to give you an overall idea and should not be taken as absolute.
Due to the stricter requirements and higher interest rates, obtaining a Tier 2 visa mortgage can be more challenging than obtaining a mortgage for UK citizens or permanent residents. Additionally, some lenders don’t offer mortgages to Tier 2 visa holders at all, so it's important to consult a mortgage broker who can shop around and compare lenders for you.
Which Mortgage Lenders Offer Tier 2 Visa Mortgages?
Multiple mortgage lenders in the UK offer mortgages to individuals on Tier 2 visas. However, not all lenders have the same mortgage affordability requirements and terms, and some may have stricter criteria than others.
Lenders offering Tier 2 visa mortgages include:
- Metro Bank
- Clydesdale Bank
- Accord Mortgages
- And more
As the requirements and terms for these lenders differs and may change, it's always best to check with our team of specialist advisers at John Charcol for advice on who can offer the best deal for your situation.
Are Tier 2 Visa Mortgages More Expensive?
Tier 2 visa mortgages may be more expensive than mortgages for UK citizens, particularly if you require a more specialist lender. Lenders view Tier 2 visa holders as higher risk borrowers as they may not have been the UK long enough to build up a full credit history.
As a result, some lenders may charge higher interest rates on Tier 2 visa mortgages and most won’t offer higher LTV (loan-to-value) products to Tier 2 visa holders, both of which can impact the upfront and overall costs of the mortgage.
The final deal will depend on the lender's policies, the visa type, the length of time the individual's been in the UK, and factors like credit history and income. Your mortgage adviser at John Charcol can talk to you about lender criteria and compare different products that could be available to you, in order to help you find the most affordable option.
Are Tier 2 Visa Mortgages Available to First-Time Buyers?
First-time buyers in the UK on a Tier 2 visa can get a mortgage. However, it may be more difficult and more costly than obtaining a mortgage as a UK citizen.
How Much Can You Borrow with a Tier 2 Visa Mortgage?
The amount you can borrow with a Tier 2 visa mortgage will vary depending on the lender, your income, and your credit history. Lenders will carry out the same mortgage affordability checks as they would with a standard residential mortgage but they may cap your maximum LTV (loan-to-value) at around 75%. In general, lenders will lend a maximum of around 4 - 5 times your annual income.
For example, if you have an annual income of £50,000, you may be able to borrow between £200,000 and £250,000 with a Tier 2 visa mortgage, assuming you meet the rest of the lender’s criteria.
Can You Remortgage with a Tier 2 Visa?
It's possible to remortgage with a Tier 2 visa in the UK. Assuming your circumstances still meet lender criteria requirements then you should be eligible for a remortgage. If your situation has changed and you’re unsure what your mortgage options are speak to a mortgage broker like John Charcol.
Can I Get a Tier 2 Visa Mortgage with Bad Credit?
Getting a Tier 2 visa mortgage with bad credit will be extremely challenging but your options will depend on the nature of the bad credit and how recent it was.
However, if you don’t have any adverse credit events on your credit profile but perhaps have a low credit score or limited credit history due to the fact you’ve only been living and working in the UK for the past few years, you’ll likely find that lenders who offer Tier 2 visa mortgages are able to take this into consideration.
Can You Get a Mortgage in the UK with a Visa if You Don't Have Indefinite Leave to Remain?
Getting a mortgage in the UK with a visa is possible if you don't have indefinite leave to remain but you’ll find the pool of lenders who can consider you limited and you may have to meet additional criteria.
Lenders may consider the length of your visa and the likelihood of it being extended when assessing your application. They may also ask for additional documentation to prove your income and ability to repay the mortgage. It's also possible that some lenders may have stricter criteria for applicants who don't have indefinite leave to remain, so it's important to shop around and compare lenders.
Can You Get a Mortgage on a Spouse Visa?
Yes, applying for a UK spouse visa holder's mortgage is possible. A spouse visa is issued to people married to or in a civil partnership with a person who's settled in the UK or has refugee status. The process of acquiring a mortgage on a spouse visa is similar to other types of visas, including a Tier 2 visa. Individuals on a spouse visa will typically need to have been living in the UK for at least 12 months, have a good credit history, and be able to prove their income. They may also need to provide additional documentation, such as a marriage certificate or proof of their partner's UK residency status.
Which Visas Are Not Accepted by Mortgage Lenders?
Not all types of visas are accepted by mortgage lenders in the UK. Some lenders may have strict policies against granting mortgages to certain visa holders, while others may be more flexible. However, the following types of visas are generally not accepted by mortgage lenders:
- Student visas - people on a student visa may not be eligible for a mortgage in the UK as they're typically not allowed to work full-time while in the country and may not have a steady income
- Visitor visas - those on visitor visas may not be eligible for a mortgage as they're typically only allowed to stay in the country for a short period and may not have a steady income here
- Tier 5 visas - individuals in the UK on a Tier 5 visa – e.g. youth mobility scheme, temporary worker – may not be eligible for a mortgage as they're typically only allowed to stay in the country for a short time, and it's unlikely they'd have a steady salary
- Short-term visas - those residing in the UK on a short term visa – less than 12 months – may not be eligible for a mortgage as they probably won't have been in the country long enough to establish a credit history
Can I Get a Buy-to-Let Mortgage on a Visa?
You can get a buy-to-let mortgage on a visa, but it's likely to be a more expensive, challenging, and time-consuming process than if you're a UK citizen. Your eligibility for this type of mortgage will be affected by the type of visa you hold and how long you've already been in the UK.
If you're in the UK on Tier 1 or Tier 2 visas, you might be eligible for a buy-to-let mortgage if you've been in the country for a sufficient amount of time and meet certain income requirements. However, you can expect to face stricter requirements, additional criteria and higher interest rates than if you were applying for a buy-to-let mortgage as a UK citizen or permanent resident.
A specialist mortgage adviser at John Charcol can guide you on the best options for your circumstances and help you through the application process.
Tier 2 Visa Mortgage Next Steps
There are several options available if you’re in the UK on a Tier 2 visa and are looking to get a mortgage, but finding the right lender with the best deal can be quite tedious due to the complex nature of the application.
An independent mortgage broker like John Charcol can match you with the best lender with criteria that aligns with your situation. We’ll talk you through the process, explain the requirements, help you gather the right documents and more. Call us on ##TELNUM### or get in touch online to get started.
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