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Re-mortgaging your UK home

Do you own a property in the UK? If so, you probably have a mortgage on it which you took out whilst living and working there. You’ve now moved abroad and probably let it out. Did you seek “permission to let” the house or flat from your UK lender? If so, great – you’ve done the right thing. But maybe you now feel stuck with that lender and perhaps on a deal that’s no longer competitive; or perhaps you have plenty of equity still in the flat or house and would like to release some, and your current lender says no?

These are some of the situations and questions I have come up against and have resolved in the past.

Let’s take a pretty standard situation. You bought a house, say five years ago, and maybe took out a three-year fixed-rate mortgage when you did so. About halfway through those three years you took up an opportunity to go and work abroad. You advised your mortgage lender what was happening and they said “Okay, that’s fine” and gave you permission to let it out whilst you were away. It’s been two years since that initial three-year fixed rate ended and since then you’ve been on their standard variable mortgage rate which, if you are lucky, might be as low as 2.50% but if you are not so lucky it could be as high as 6%.

What happens if you’d like to get a better mortgage rate? Your current lender might be happy to help and offer you a new deal. But what if you want to release some money from the available equity at the same time? Your current lender says, “No, sorry, as you don’t live and work in the UK we can’t lend to you.”

Well, in situations like this there are choices which might work for you. Either you can apply to offshore banking divisions of major UK banks, some of whom have deals that meet your requirements, or if you do plan to come back to live in the UK within, say, three to five years then there are some UK banks who will offer you the same deals they offer their UK-based customers. Not all banks will, but some do.

Everyone’s situation is different, but the key thing is to do some research and ask the question – there may well be a solution that fits your scenario.

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