Seafarer Mortgages

Seafarers are considered a higher risk to lenders and therefore they have a specific seafarer mortgage. This is partially because it is harder to confirm the tax status and income of someone working as a seafarer. There’s also the concern that people who work abroad or at sea could default on their mortgage payments and are harder to contact. This means that the interest on seafarer mortgages can often be higher than standard residential mortgages for people who are in the UK all the time.

Residential Mortgages for Seafarers

Most lenders will consider mortgage applications from seafarers who want to buy a residential property. Requirements could include a higher deposit requirement and higher interest rates.

If you’re considering a second or holiday home mortgage, this might be harder to get. Second homes are already classed as higher risk because if you face financial difficulties, evidence shows you’re more likely to default on payments for your second home rather than your primary residence.

You could also face additional difficulties in other cases where the risk is higher, but a broker can help make sure that you have a larger range of mortgage options available to you.

Buy-to-Let Seafarer Mortgages

Getting a buy-to-let mortgage is possible, whether you want to have a long-term rental opportunity, or a holiday let. As a seafarer, you might have to provide a significantly higher deposit — usually around 25% as a minimum.

Buy-to-let mortgages are considered higher risk than residential mortgages, especially if you’re not going to be in the country to manage your property for long periods at a time. This can make the property less appealing to renters if issues aren’t handled quickly. You can mitigate this by finding a professional rental management company to handle your rental property for you, but the mortgage lender might want to see adequate proof of this.

Alternatively, you might be able to show proof that you’ve been managing other rental properties without issue for a number of years. The concerns over the management of rental properties will be higher for houses in multiple occupancy, such as student housing, holiday lets and Airbnb properties. Consider any tax implications of rental income alongside your seafaring income and tax allowance.

Typically, mortgages for seafarers are for people who spend at least half of the year in the UK. If you spend more than six months of a tax year outside the UK, you might be refused a seafarer's mortgage. In these cases, look at expatriate mortgages, as these are designed for people who aren’t primarily in the UK. You might be able to get a non-expatriate mortgage even if you spend more than half of the year outside the UK, but this will be down to the individual lender. You’ll also need to prove that you have a home in the UK where you do spend certain amounts of time and that you’re registered to vote at that address. You’ll also need to show all evidence of your travel and trips in and out of the UK.

Expatriate Mortgages vs Seafarer Mortgages

Expatriate mortgages are for people who are primarily out of the UK. Compared to seafarer mortgages, expatriate mortgages typically have higher interest rates and might require a higher deposit amount. This is because expatriate mortgages are a higher risk for lenders — if a lender defaults on a mortgage while living outside the UK, it could be very hard for the bank to take action against them. One of our experienced brokers can help you find ways to make sure that you get the best type of mortgage for your needs, whether that’s a seafarer or expatriate mortgage.

Since the primary difference between a seafarer mortgage and a normal residential mortgage is your proof of income and residency, most of what you need will be similar to the information needed for any other mortgage application.

Proof of Residency

Seafarer mortgages are only for people who have a permanent right to reside in the UK. You’ll likely be asked to prove your residency status before your application is considered. Most lenders will ask to see your passport and HMRC paperwork, though some lenders will request additional proof of residency as well and proof that you live in the UK while not at sea.

UK Bank Account

Many mortgage lenders only accept applicants if they have a UK bank account for handling payments. There may also be regulations and rules that your deposit has to have been in a UK bank account for a certain length of time before you make the house purchase. You can check this with your mortgage provider or broker.

Insurance

Having proper home insurance is important for getting a mortgage — most lenders want to make sure that the property is protected in case they have to reclaim it after a borrower defaults. Lenders will require buildings insurance as a minimum.

How Time at Sea Affects Getting Home Insurance

Seafarers might find it harder to get home insurance. If the house remains empty for long periods of time, it’s considered a greater risk. Many home insurance policies do not cover a building if it’s left unoccupied for more than 30 days at a time. This could lead to your insurance being invalidated and your mortgage terms being breached. Speak to a broker to ensure you get the right type of insurance if the property is going to be left unoccupied for over a month at a time.

Deposit

Since seafarer mortgages are seen as higher risk than normal residential mortgages, you’ll usually find that the required deposit starts at around 15% of the property value. Some lenders will accept lower deposit amounts — potentially even as low as 5% — but this could lead to higher interest rates.

In some cases, it can be a lot easier for a seafarer to get a mortgage with a partner.

Multiple Incomes

If your partner is employed and paid in the UK, their income can be counted for affordability. This can help lessen concerns over tax statuses. It can also counteract the concerns over seafarers with variable incomes. If your partner has a stable income, their income might be counted as the primary measure for affordability.

Continued Occupancy

A lot of mortgage lenders are hesitant to lend on properties that will be empty for a long period of time. If your partner will be residing in the house permanently, even while you’re at sea, this can help make it easier for you to get a mortgage. This also makes it easier for you to get appropriate insurance for the property. If you’re looking at buy-to-let properties, your partner could also be the primary manager of the properties, helping to avoid concerns over management.

Seafarer's mortgages for residences are typically similar to a standard residential mortgage, but there can be additional difficulties with the need to prove income, tax status, and residency. If you’re looking for a buy-to-let property or a mortgage for an unusual property, it can increase the difficulty of finding a suitable mortgage.

A seafarer's mortgage is only for people who reside in the UK. If you spend more than 6 months outside the UK, consider expatriate mortgages instead.
Getting a mortgage with a partner can help to circumvent some of these problems, but you’ll still be asked to prepare evidence in order to apply for a mortgage.

Here at John Charcol, we have years of experience with complex mortgage cases. We can help find you specialist lenders and make sure that your application has the best chance of being accepted. If you’re a seafarer in the UK looking for mortgage options, get in touch today to see what we can do for you.