As the name suggests, an overseas mortgage is a type of mortgage you take out on a property abroad.
If you’re planning to use the overseas property as security, you’ll likely need to get a mortgage from a bank or lender in that country or territory.
If we already offer HSBC personal banking in the country or territory you’re wanting to buy in, we can refer you to a mortgage specialist located there.
The process of buying a property abroad may be different to your home country or territory. For example, you may need to put down a larger deposit to buy a property abroad if you’re a non-resident. So take the time to do your research.
Make sure you understand all the risks involved with buying a property abroad. For example, if your income is in a different currency to your overseas mortgage, there’s a risk that exchange rate fluctuations could impact your ability to pay. If you’re planning to let the property, you’ll need to make sure you can cover the mortgage payments, even if your property is unoccupied.
Finding your own independent lawyer and translator (if needed) to look after your interest can be useful.
If you already own a UK Buy to Let property, you could look into releasing some equity to pay for a property aboard – if you can afford to.
Home equity is the value of the property, minus the amount of any outstanding loans secured on it, like a mortgage. For example, if your mortgage balance was £100,000 and your home is worth £500,000, you’d have £400,000 equity in the property.
Releasing equity can help you fund an overseas property, but you need to think carefully about doing this.
When you borrow more against the value of your home, your mortgage and monthly repayments will increase. Make sure you can afford the repayments.
It’s also important to note that house prices can go up and down. If the housing market falls, it could put you in negative equity, meaning you’ve borrowed more money than your home is worth. Changes to the exchange rate could also affect the value of a property.
Using savings to buy a property in another country or territory can help overcome the challenges of borrowing money. You’ll need to make sure you can afford the property and have enough to cover any expenses, such as:
It’s important to get independent legal and financial advice before handing over any money.
Think carefully before securing other debts against your home.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.