Comment: Expats need mortgages too


NatWest’s withdrawal from expat mortgages is a blow but also an opportunity for others, as long as terms are reasonable

Even though NatWest had been talking for years of pulling out of the expat mortgage market, its recent withdrawal still came as a bit of a shock. Applications may have been time-consuming and often problematic but they were generally worth the effort. The bank provided British expats across the world with incredibly low rates and the opportunity to purchase homes to live in on their return.

When Halifax and Scottish Widows stopped offering expat mortgages, there was concern the market would not recover. But while NatWest’s withdrawal is a blow, it presents an opportunity for other lenders. Indeed, some building societies are very pleased it is pulling out. They know they have a real opportunity to attract a range of well-paid and often cash-rich borrowers who do not like to miss mortgage repayments. After NatWest’s withdrawal, more expats will need to purchase a property as a buy-to-let and refinance it to a residential if they want to live in it when they return home.

When brokers seek a lender for a mortgage application, one of their first actions is to find out where the client lives and works. Some lenders, such as Together, do not seem to have a list of unacceptable countries but others, like Skipton International, do. It has just reduced this list and now lends to expats in Colombia, Costa Rica, Ghana, Mongolia, Northern Cyprus, Senegal, Sri Lanka, St Vincent and the Grenadines and Turkey.

I have spoken to a couple of well-known lenders that are considering re-entry to this market. They understand there are healthy profit margins but, if they do return, their terms must be reasonable. Some current mortgage rates and arrangement fees seem rather expensive and put expats off.

Aaron Strutt is product and communications manager, Trinity Financial Group