An overseas mortgage is a type of mortgage you take out on a property that’s not in the UK.
If you want to use the overseas property itself as security, you'll probably need to get a mortgage from a bank or other lender in the country you want to buy in. You could also use a specialist broker.
Keep in mind – buying a property overseas is likely to be a very different process to that in the UK. Non-residents may also need to put down a larger deposit for an overseas mortgage, compared to residents.
It’s important to consider the additional risks involved. For example, if your income is in a different currency to your overseas mortgage, there’s a risk that exchange rate fluctuations could impact your ability to pay. And, if letting the property, you’ll need to cover your mortgage payments, even if your property is empty.
It’s recommended you use your own, independent lawyer and translator (if needed) to look after your interests. The Foreign, Commonwealth & Development Office (FCDO) provides a list of English-speaking lawyers and interpreters and translators in different countries to help you.
Some UK banks, including HSBC, offer international banking services to help make the process easier. If eligible, you may be able to apply for an overseas mortgage. You’ll need to check that we support your chosen country.
If you can afford to, you may consider releasing equity from your UK home, and using that money to pay for a property abroad.
Please note – HSBC doesn’t provide equity release to purchase a property overseas.
Home equity is the value of your property, less the amount of any outstanding loans secured on it, such as a mortgage. For example, if your mortgage balance is £100,000 and your home is worth £400,000, you have £300,000 equity in the property.
Releasing equity could be a way to unlock some of that value as cash to help you fund an overseas property. But you need to think carefully about doing this.
When you borrow more money against your home, the size of your mortgage – and your monthly repayments – will increase. You need to make sure you can afford the repayments to avoid your UK home being repossessed.
House prices can go down as well as up. If the value of your UK home falls, you could go into negative equity – where you’ve borrowed more money than your home is worth. A change to exchange rates could also affect the value of your overseas purchase in pound sterling.
If you have the funds already, buying a property abroad in cash can overcome the challenges of borrowing money. It’s important that you can afford the property and have enough savings to cover expenses, such as:
international bank transfer fees
tax and legal fees
furniture, shipping and insurance costs
landlord insurance (if buying an investment property to rent out)
ongoing costs to maintain the property
Before handing over any money for an overseas property, it’s important to get independent legal and financial advice.
Before you escape to the chateau in France or jet off Down Under, it’s important to consider the costs and risks involved when buying a property overseas.
It’s recommended by the Foreign, Commonwealth & Development Office (FCDO) that you get independent legal and financial advice at every stage of the buying process.
Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage.