How to finance your overseas property purchase
Need finance to purchase your overseas home? I explore the options available in today’s market.
If you're not a cash buyer, it's essential to explore your financing options early on. Start by setting a realistic budget – keeping exchange rate fluctuations in mind – identifying where your funds will come from and seeking professional guidance. This preparation will help you choose which of the following options best suits your circumstances.
Using a broker
The go-to route for securing a foreign currency mortgage is through an overseas mortgage broker. These specialists are typically based in the country where you’re buying – often expats themselves – and focus on helping overseas buyers navigate the local market. Some brokers are UK-based but operate across multiple countries with deep networks and expertise.
Brokers are worth their weight in gold when buying abroad. Fluent in both English and the local language, they offer essential on-the-ground insights and connections. With established relationships across a range of local banks, they can source the most competitive mortgage deals available – often including exclusive offers not available to direct applicants. Foreign lenders frequently offer flexible mortgage products, including rate discounts when bundled with other services. Your broker will handle these negotiations for you.
A good broker doesn’t just find you a deal – they manage the entire process from start to finish. They'll ensure your financial profile aligns with local lender requirements, secure an agreement in principle, and have this ready for making an offer.
Direct from a foreign bank
Another option is to arrange your mortgage directly with a local bank in the country where you're buying. This is typically done through a referral or recommendation from your estate agent or developer. They should know which banks are best equipped to work with international buyers and may even introduce you to a trusted contact.
The most experienced foreign banks typically have English-speaking teams dedicated to serving overseas clients. Success with this approach requires a reliable point of contact – someone who speaks English and can clearly explain the process. Service levels can vary between branches of the same bank, so having the right connection is key.
Through a UK bank
Many high street banks offer overseas banking services or private wealth management tailored to expats and individuals with international interests. Likewise, several foreign banks with branches in London provide international banking solutions. These institutions often collaborate across their global networks, enabling them to offer foreign mortgages via their UK operations. Fewer banks now offer this route, but notable options still include HSBC, Deutsche Bank, and BNP Paribas.
One advantage of using a UK-based international lender is the convenience, with everything handled in English through a local UK office. The process is typically faster too as the lender will have easier access to your UK credit history.
Remortgage or equity release
Remortgaging a UK home is a common way to raise funds to buy a property overseas. The money you release can either be used to purchase the property outright or to put down as a deposit. It's worth noting that remortgage options can become more restricted as you get older.
An alternative is equity release, often through a lifetime mortgage. This allows you to access the equity in your home as a lump sum or in smaller, staged payments – without the need for monthly repayments. The loan, along with any accrued interest, is typically repaid when your home is eventually sold.
Another option to unlock capital is downsizing. By moving to a smaller, less expensive property in the UK, you may free up enough funds to purchase a second home abroad – either entirely or with additional financing if needed.
Consult a currency specialist
Whether you're financing your overseas property or buying it outright, you'll need to transfer your home currency into a foreign currency account abroad to make your purchase. Speak with a currency specialist to discuss your requirements and discover how you can insulate your international property transactions against currency risk.