What Happens to Your Mortgage if You Move Abroad
If you’re a homeowner planning to move abroad, you’ll be pleased to know that your mortgage won’t be affected significantly if you decide to leave the country.
However, you will need to let your lender know and apply for a consent-to-let if you plan on renting your home out while you're living overseas.
One of the biggest myths about homeownership is that once you buy a house, you’re stuck in one place. In fact, it’s very much possible to keep paying your mortgage while living in another country. The difference take effect when it’s time to remortgage, as your mortgage will likely become more expensive.
The main factors you’ll need to be aware of are that you’ll need to let your lender know about your plans before you get anything started, account for any potential increased costs, and have a plan for how you’ll keep up with your mortgage while living abroad (such as letting it out).
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Do I Need to Tell My Mortgage Lender if I Move Abroad?
Remortgaging While Living Overseas
When Do I Stop Being a British Resident?
Will I Still Need to Pay Council Tax?
Do I Need to Tell My Mortgage Lender if I Move Abroad?
Yes, if you have a mortgage in the UK and are planning to move abroad, you should inform your lender. Most mortgage agreements include a clause requiring borrowers to notify the lender of any significant changes in their circumstances, including a move overseas. Failing to do so could put you in breach of your mortgage terms, potentially leading to penalties or complications in the future.
If you are planning to live abroad but keep your UK property, your lender may want to assess how you intend to manage mortgage payments. If you plan to rent out your home, you may need to switch to a buy-to-let mortgage or obtain a "consent-to-let" from your lender, as residential mortgages typically do not permit long-term letting without permission. Some lenders have specific policies on expatriate homeowners, which could mean changes to your mortgage terms or an increase in interest rates.
Additionally, moving abroad may affect your ability to manage your mortgage payments due to currency exchange fluctuations, overseas banking restrictions, or changes in income sources. Some lenders require a UK bank account for direct debit payments, so ensuring you have a suitable financial setup before moving is crucial. If your lender is aware of your plans, they may be able to offer guidance or alternative arrangements to prevent any disruptions.
Remortgaging While Living Overseas – What’s the Process?
Remortgaging is where owning a home as an expat can get a bit more complicated. Once you start living in another country, you’ll be considered an expat, and you’ll need a specialist mortgage.
This is because you’ll likely be earning in a different currency and the added administrative burden creates more complexity than most UK lenders are used to. So when it’s time to remortgage you’ll need to find a lender that can cater to these differences. In some cases, you might be lucky enough that your current lender offers an expat version of your mortgage product, and you can switch over relatively seamlessly. But because international mortgages are more niche, the rates will generally be less competitive.
And if you're letting your home out, this adds another layer of complexity that can affect what rates are available to you.
The good news is that if you’ve owned your home for a while, it’s likely you’ll have paid some of your mortgage off already. This means you’ll have built some equity in your home, lowering your loan-to-value ratio and strengthening your case for more advantageous expat rates. Nonetheless, if you’re unsure how to navigate this process, or you want to ensure you’re getting the best deal, it’s worth consulting a specialist expat mortgage broker.
A specialist mortgage broker will have relationships with mainstream and private lenders, and can make sure the process goes as smoothly as possible.
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What is Consent-to-Let?
Consent-to-Let is when you get permission from your lender to rent out your property while under a standard residential mortgage. In many cases, if you tell your lender that you are moving abroad for work purposes and want to let it out, they will be open to granting you consent-to-let.
This is typically only a short term solution, and if you end up living away from the UK for more than a few years, it's likely you'll have to remortgage to buy to let mortgage. It's worth talking over your options with your lender before you go, as each lender will have different rules around these circumstances.
It's also important to research how much monthly rental income you'll be able to get for your property based on your home's location and value.
Switching to a Buy to Let
Eventually you may have to switch to a buy to let if you're living in another country long term.
Here are the key differences of expat buy to let mortgages:
- Stricter Eligibility Criteria – Lenders typically require a higher deposit (often 25% or more) and may assess your expected rental income against their affordability criteria (usually needing rent to cover 125–145% of the mortgage payment).
- Higher Interest Rates – Buy-to-let mortgage rates tend to be higher than residential mortgage rates, especially if you are living abroad, as lenders consider expat borrowers a higher risk.
- Tax Implications – Rental income will be subject to UK income tax, and if you sell the property later, you may owe Capital Gains Tax (CGT). As an expat, you must comply with the Non-Resident Landlord Scheme (NRLS) and file annual tax returns.
Lenders usually require that rental income covers at least 125–145% of the mortgage payment, often calculated at a higher "stress-tested" interest rate. However, particularly in the current climate, this can be quite a narrow criteria to fill, so some banks allow you to make up some of the shortfall with your employed income, just as long as you can prove that you have enough disposable income. This is known as "topslicing".
When Do I Stop Being a British Resident?
You stop being a British Resident when you spend two or more years living in another country, or if you renounce your British citizenship. When it comes to your mortgage, it's worth looking at details carefully, but because if you can prove you still have some level of residency in the UK, even if you're living and working abroad, you'll be able to retain access to standard mortgage rates and the remortgaging process will be simpler.
You may still be a British resident if:
- You spend more than 183 days in Britain
- You have a home here for over 90 days at a time
- If you're present at that home for 30 separate days in a year
In cases where you're travelling between countries for work, you may assume that your country of residence is where you're paying rent or living for the most time. But if you fit the criteria above, you could be eligible for standard UK residential rates even if you've been 'living' in an another country.
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Will I Still Need to Pay Council Tax?
Yes, in most cases, you will still need to pay council tax on your UK property even if you move abroad. However, the amount you pay and whether you qualify for any discounts or exemptions will depend on your specific circumstances and the local council’s policies.
If your property remains furnished and unoccupied while you are abroad, you will generally still be liable for full council tax payments. Some councils may offer a discount for empty properties, but this varies by area. You should check with your local council to see if any reductions apply.
If you rent out your property while living overseas, the responsibility for council tax usually falls to the tenant. However, if the property is rented as a "house in multiple occupation" (HMO), where tenants rent individual rooms rather than the entire property, you as the landlord may still be responsible for paying the council tax.
If your property is completely unfurnished and unoccupied, you may be eligible for a temporary exemption or discount, though the rules vary between councils. Some councils offer exemptions for up to six months, while others may still charge a reduced rate.
Do You Need to Tell HMRC if You Move Abroad?
Technically, you don’t need to let HMRC know if you’re leaving the country if your house will remain unoccupied. However, if you plan on renting in out, you’ll still have taxable income in the UK so you’ll need to make HMRC aware of your circumstances to avoid any confusion.
Get Access to Expert Guidance
There’s no doubt that arranging UK finance as a Dubai resident is more complicated that for UK residents. It’s frustrating when you find that traditional high street lenders are constrained by rigid lending criteria when you have the means to purchase a property.
- We work closely with a range of specialist UK lenders who are experienced in funding British expatriates based in Dubai and elsewhere. When making their offers, these lenders will consider your various income streams, investments, and issues relating to currency conversions.
- We offer mortgage services for lower-priced properties, but we can also service very large mortgage options and complex financial affairs.
- We know that you're busy and may need to move quickly: we can often obtain pre-approval terms within 24 hours so that you don’t miss out on any potential opportunities.
To see what we can do for you, call us at 0117 332 5563 or book a free consultation below.
