Overseas mortgages

There are several ways to obtain a mortgage for foreign property. You can remortgage your existing UK home to raise enough equity to buy a foreign home, so long as you keep up the increased interest payments.

Alternatively, you can apply for a mortgage from a high street bank to buy abroad. Currently, Santander and the Spanish arm of Halifax offer mortgages for buying in Spain, while Lloyds TSB and Barclays lend for home purchases in the main Western European countries (France, Spain, Portugal and Italy) as well as countries like South Africa, Dubai and the US. Those seeking a mortgage for more exotic countries may struggle to find a mainstream bank willing or able to lend.

Another option is to go to a specialist broker for an overseas mortgage – some may have links with estate agents and lawyers in the country you want to buy a property in. But homeowners must be aware that unlike high street banks who lend overseas mortgages, brokers are not covered by the FSA, so you cannot seek redress if you are missold a mortgage.

Furthermore, obtaining a mortgage in some countries is very difficult now. Since the housing crash, lenders have raised the deposit needed to get a house approved and lending criteria has been tightened up, so homeowners need to have enough equity to go down this path.