| Loan amount | £12,000,000 |
| Property value | £20,000,000 |
| Loan-to-value | 60% |
| Property type | Prime central London residence |
| Location | Mayfair, London (W1) |
| Borrower | UK expat, Singapore-based |
| Term | 25 years interest-only |
| Rate | 5-year fixed |
| Lender type | Private bank |
| Income | USD |
The Story
As a leading UK mortgage broker specialising in large mortgage loans for British expat clients, we recently navigated the intricate landscape of securing a £12 million mortgage for an expat working at a blue-chip international company in Switzerland. This case study sheds light on the complexities associated with expat mortgages, particularly addressing challenges stemming from currency fluctuations, earnings in a foreign income, and the heightened due diligence required by UK mortgage lenders.
The Challenge
Securing a mortgage for expats presents unique challenges that demand a thorough understanding of international finance and the intricacies associated with borrowers residing overseas. In the case of our client based in Switzerland, several challenges need to be addressed:
- Currency Fluctuations:
One of the primary challenges in securing a mortgage for an expat is dealing with currency fluctuations. Mortgage lenders often approach foreign income with caution due to the potential volatility and uncertainties. However, our client’s income earned in Switzerland came from an international company and they had a consistent track record of their earnings. The mortgage lender still applied a ‘haircut’ to their earnings to allow for currency fluctuations.
- Expat Due Diligence:
Lenders impose additional due diligence requirements for expat mortgages. This includes analysis of the country’s currency fluctuations versus GBP, checks to ensure the country is not a FATF high-risk country and additional AML checks. Often a client will require a notary in their country of residence to certify ID and proof of address. Sometimes their documents are in a foreign language which also requires additional underwriting from the mortgage lender.
The Solution
Fox Davidson successfully navigated these challenges, using our specialised expertise and lender relationships to secure a £12 million private bank mortgage for our client.
Fox Davidson’s established relationships with lenders specialising in expat mortgages played a crucial role. We engaged in negotiations with lenders, highlighting the unique attributes of our client’s financial profile and the use of the property in the UK as a main residence for their family to reside in. Our goal was to secure competitive interest rates and terms that aligned with the client’s financial goals.
Recognising the importance of an efficient due diligence process, Fox Davidson streamlined the client’s file, ensuring all required documentation was organised and presented in a manner that facilitated a quicker and smoother review by lenders. This expedited process was essential given the client’s international location.
The successful outcome of securing a £12 million mortgage for our expat client in Switzerland showcases Fox Davidson’s commitment to overcoming the complexities associated with expat mortgages. By addressing challenges related to currency fluctuations, foreign income considerations, and heightened due diligence, we demonstrated our ability to navigate international financial landscapes and secure a specialist solution for our clients.
Frequently asked questions
What is a high net worth mortgage?
A high net worth (HNW) mortgage is assessed under the FCA’s high net worth rules rather than the standard affordability test. It is available to borrowers with net assets over £3 million or annual net income over £300,000. Lenders read the net assets test literally and include the equity in your main home, and on a joint application only one of you needs to meet it.
How does HNW mortgage assessment differ from a standard mortgage?
HNW assessment is whole-of-wealth based rather than income-multiple based. Lenders consider total assets, liabilities, liquidity, income, and lifestyle costs, then negotiate loan size based on the overall financial picture.
What loan sizes are available with HNW mortgages?
HNW mortgages typically start at £1 million minimum and have no upper cap. Loans of £5 million to £20 million are routine for qualifying clients. Loans above £20 million typically involve syndicated lending or relationship-driven arrangements with private banks.
How long does an HNW mortgage take to complete?
HNW mortgages typically complete in four to ten weeks. Mainstream HNW lenders are at the faster end. Private bank cases involving committee approval, complex structuring, or offshore elements can take eight to twelve weeks.
Further reading: large mortgages, private bank mortgages, UK international mortgages, high net worth mortgages.
All rates and terms are indicative and subject to individual assessment, lender criteria and property valuation. Your home may be repossessed if you do not keep up repayments on a mortgage.
High net worth mortgages under the FCA high net worth definition. Private bank and specialist lender access.