At Articus Finance, we often discuss the complexities of arranging a mortgage as an overseas resident. Whether you’re a self-employed British national living in Dubai, or a Saudi Arabian businessperson buying a home in London, there are many subtleties at play which make high-value mortgage finance a complicated arena.
But one thing is simple: almost every mortgage borrower, no matter their circumstances, wants to secure the lowest possible interest rate to make the cost of borrowing as low as possible. And the bad news is, interest rates are set to rise after years of historic lows – meaning those looking to remortgage or take out a new loan need to act fast if they want to secure the lowest rates now. For many overseas residents, a fixed rate mortgage could be the answer.
Why are interest rates going up – and how does this impact overseas residents?
The Bank of England (BoE) base rate (0.10% at the time of publication) is the rate that banks and lenders pay when they borrow from England’s central bank. This interest rate is significant because it influences rates for a range of financial products, from mortgages to loans and savings accounts.
The base rate has been set at historic lows since the start of the pandemic – and even before that, had been set at a very low rate ever since the global financial crisis. This meant that even overseas residents – who typically have to pay more for UK property finance – could secure very good deals, whether that was a fixed rate or a variable tracker product.
However, with inflation rising fast, the BoE will look to mitigate this by raising the base rate – encouraging consumers to save, not spend.
How can overseas residents mitigate the risk of rising mortgage costs?
Whether you’re in the process of buying a property or need to refinance an existing asset, there is a way to protect yourself against potential rises in interest rates over the coming years – but the lock in the best deal, you’ll need to act fast, because the next opportunity for interest rates to potentially rise will be on the 16th of December.
The best solution for you will always be calculated based on your personal circumstances. That said, many overseas residents will find that securing a fixed rate mortgage product – which can typically be arranged for a period of between 2-10 years – is the best way to protect themselves against rising costs. Although this removes an element of flexibility (as you will be tied in for the mortgage for the duration of the fixed term), it does provide certainty of exactly what your repayments will be, removing any risk that these will spiral in line with changes in the base rate.
This is particularly important for overseas residents with large mortgages. If you have a high value mortgage on a tracker rate, even a fractional increase in the base rate could increase your repayments significantly. So, there’s potentially huge value in fixing the rate of your monthly repayments now – and this also gives you peace of mind of knowing exactly what your repayments will be for the foreseeable.
How quickly can I arrange a fixed rate mortgage product?
Arranging a fixed rate mortgage as an overseas resident can be a time-consuming process, and if you attempt this without assistance, could take months to finalise – during which time the base rate may have risen further.
The team at Articus are well-versed in arranging mortgage finance for overseas residents, no matter what part of the world you’re currently living in. We work with complex cases day-in, day-out, so there’s no situation too complicated for us to assist with. And our excellent relationships with private lenders and specialist banks across the market mean we can negotiate for excellent deals in short time frames – using our contacts to ensure you’re not left paying over the odds.
Want to discuss your mortgage options as an overseas resident? Our team are on hand to help – get in touch to discuss your situation.
