Tier Two Visa Mortgage
- Get expert mortgage advice from 5- star client service reputation advisers
- We’ll find your perfect mortgage solution from across the whole of the market
- Our team will support you through every step, even after you have your mortgage offer
Get in touch for a free, no-obligation chat with our trusted advisers about how we might be able to help you.
What's On This Page?
Get In Touch
Tier Two Visa Mortgage
Rita Kohli explains how the mortgage process works if you have a Tier 2 visa.
What is a Tier 2 visa?
Tier 2 is the main immigration route for skilled workers to come and work in the UK and take up employment. They’ve got to have had a job offer from a UK-based employer, who sponsors them to work in that company.
How do I qualify for a mortgage with a Tier 2 visa in the UK then?
There’s a few extra steps compared with a permanent UK resident, because obviously you’ve got to explain more about yourself and how long you’ve lived in the UK.
You must show that you’ve lived in the UK for a minimum of 12 months at the point of making a mortgage application, and, depending on the bank we speak to, you may need quite a high minimum income.
For an individual, an income would have to be £75,000, without any additional allowances such as bonuses. If it’s a joint application, they like to see £100,000 as minimum earnings, again, with no variable income. In addition to that, you’d need to show you’ve got at least 15% deposit in savings. The deposit must come from your own sources.
We also need to look at exactly what type of Tier 2 visa you have, because there can be different forms. If you meet all of those criteria, the rest follow standard mortgage requirements – we’d look at affordability, how much the mortgage would cost you and what rates you can expect.
Can self-employed individuals get a mortgage on a Tier 2 visa in the UK?
Yes, as long as you meet the minimum income criteria and have lived in the UK for at least 12 months. The challenge for the self-employed, though, is that the banks take an average of your last two years’ tax returns and self assessments, depending on what your self employment status is.
To show £75,000 in income or £100,000 for a joint mortgage application, they will take into account what the last two years’ income looks like. That might be a bit more challenging.
If you’ve only been here 12 months, you’re only going to have, in theory, one set of accounts. It can be done, but you may have to wait longer to show how much income you’ve earned.
Is it necessary to have a certain amount for a deposit when applying for a mortgage with a Tier 2 visa?
The bar is quite high already to achieve a minimum mortgage. You would have to have at least 15% deposit, but 15% to 25% gives you a bigger range of lenders to use. As well as that high earnings threshold, some banks may require a higher deposit.
Purely because you’re on a visa, there’s that uncertainty as to how long you’re going to stay in the UK. How long you’ve been in the country also influences your credit history. Because they consider that you are slightly higher risk, more deposit is expected from you.
What is the minimum and maximum amount one can borrow on a mortgage with a Tier 2 visa?
Again, it comes down to affordability. If you’ve got relatively good earnings, which you obviously need, your threshold should be much higher for a mortgage. It would be a case of deciding which banks we’d be looking to use and then assessing their calculators to see the maximum they would lend you.
There is no real minimum or maximum. It comes down to affordability. If you’ve got loans and dependent children, that is factored in to calculate how much you can borrow.
What documents are required for a Tier 2 visa mortgage application?
Again, it’s about showing your status as a foreign national in the UK. We certainly need to see your passport and the visa status on that. I think it’s phasing out, but you might have a biometric card with a photo to go alongside your passport.
On a newer government scheme, you go online, enter your details and it shows you exactly what your visa status is. It’s then really clear to us and the lenders as to what type of visa you’re on and when it expires, which is really key.
If that visa is coming up for expiry, we need to understand what’s next. Are you applying for permanent residency? What does that entail and what are the time frames? Again, you’d have to show evidence of the next steps. Once you can show all of that, we need your credit report and your address history in the UK.
It’s good to keep all your address documents together, especially if you’ve been in rented accommodation, and make sure you’re on the electoral roll as that helps with your credit file.
Collect four months bank statements to show your account activity, and three months pay slips to evidence your earnings.
Speak To an Expert
How long does the Tier 2 visa mortgage process take then from application to approval?
The good news is that once we’ve checked everything with the lender, it’s just based on their service levels and how busy the bank is. If they’re quiet, we’ll get a quicker decision.
Typically, I would allow 10 working days for an application, irrelevant of your visa status. During those 10 days, not only is your application assessed by an underwriter at the bank, they also do a valuation on the property you’re looking to buy. All of that needs to match up.
Then, hopefully, you get a final offer decision which says you’ve been accepted for the mortgage.
Are there any restrictions on the type of property that can be purchased with a Tier 2 visa?
No. You’re not restricted on where you buy or the type of property. It just needs to check in with the lender’s criteria.
If you’re looking to buy a flat, then it’s worth having a conversation with an advisor beforehand. Not only do you have those extra steps that we’ve discussed, but with a flat there’s additional information that banks expect you to have around the type of flat and lease agreements.
But that’s standard for everybody. If you’re buying a house, it’s a little bit simpler, but certainly you can buy wherever you need to.
What are the interest rates and fees associated with getting a mortgage on a Tier 2 visa?
Again, there isn’t a specific Tier 2 type mortgage as such. It’s just the criteria we’ve mentioned that you need to meet. You’re actually able to get a mortgage like anybody else, with the same deals.
Obviously, rates will be specific to how much you’re borrowing, and the loan amount against the value of property. If you’re putting in more deposit, the interest rate should be lower, and the same for fees, which we’d explain at the time because they’re always changing.
Although there’s a minimum 15% deposit, things improve if you’re able to put in 20%, 25% or even 40%. That’s how it’s tiered in terms of the interest rates. At 15%, rates are a little bit higher. If you put in 20% or 25% they start to drop.
If you’ve got a 40% deposit, you’re at the lowest rates and the most competitive deals. Again, that applies whether you’ve got a visa or whether you’re a permanent resident.
Are there any additional costs that need to be considered when applying for a mortgage with a Tier 2 visa?
Again, it’s all standard. It would cost the same as for a permanent resident in the UK. You’re already putting in a higher deposit, and that’s the main difference between being a permanent resident and being on a visa – everything else, including rates and fees, are the same.
You also need to allow for legal fees and stamp duty. Make sure that whatever purchase price you’re going for, you’ve worked out how much you have to pay on top for those fees.
What if I have bad credit? Can I still apply for a mortgage with a Tier 2 visa?
You can. It would be tricky, though. It does restrict you – and again, that’s irrelevant of your visa status, it applies to anybody. If you’ve got bad credit, we can only use specialist lenders, and it depends on the situation. We need to understand your credit report, how long ago the issue happened and the circumstances around it. Was it rectified?
We then look at which lenders would allow it. If they then won’t allow a Tier 2 visa, then unfortunately, you may not get a mortgage.
But some lenders may change the goalposts for a small blip. A late payment on a credit card that happened four years ago might just be disregarded. It really is down to your circumstances.
How does remortgaging work for those on a Tier 2 visa?
There’s no difference just because you’re on a visa. The deals are all the same. By the time you’re coming round to your next renewal, you may have already started to apply for permanent residency in the UK, in which case you’d be able to apply for a standard mortgage and look at new deals. There are no extra requirements.
But if you still are on a visa and you come to remortgage, it’s not the end of the world. You just supply all your same documents that I mentioned earlier.
Can I get a Buy to Let mortgage on a Tier 2 visa?
Not usually, because the idea is that you have your own residential property first. If you’ve already got one, then potentially we could consider Buy to Lets.
We need to understand your financial situation – because if you spent quite a bit already buying your first property, you may have to wait to build up a deposit for a Buy to Let. You’d have to follow all that criteria as well. I would say it’s best initially to focus on buying your own residential property.
How can a mortgage broker help here? Have you got anything else you’d like to add?
When you’re doing initial research yourself, it’s not always clear-cut. It is much easier to speak to an advisor as we deal directly with the lenders. We have that relationship. If something’s not quite clear, we can go straight to the lender to discuss your situation.
They can explain what would be needed and any extra steps, so we can guide you. We offer a lot of handholding in this process – you’re new to the country and you’re new to the rules here. We help you understand all the questions we’ve just gone through.
Something to highlight again is the source of your deposit. It has to be your own resources. It can’t be a gift from mum and dad in your original country. If you are bringing money over from your home country, having the whole audit trail is really important.
If you’re from Brazil, for example, and you have a savings account in Brazil but want to use that money to buy a house here, you need to show when you opened that account, how the money was built up, where it came from, and how much it’s going to cost you to transfer it over to UK pounds.
It’s purely down to money laundering regulations. We have to show exactly how you got that deposit for the lender – and the solicitors will also ask for the same information.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.