Long-distance landlords are the subject of a bun fight between mortgage lenders looking to bring in new business from people living overseas.
As Telegraph Moneyreported earlier this month, banks have been expanding their range of buy-to-let deals to try and generate more business from the flagging sector. The latest area they have turned to is expat buy-to-let mortgages.
Many people living abroad choose to keep a buy-to-let property in the UK for investment purposes, or in case they return to the country at a later date. However, the mortgage rates offered to these customers are typically much more expensive than they would be for UK-based buyers.
The options are increasing. Specialist bank Paragon has launched its first expat buy-to-let mortgage, offering favourable terms and attractive rates, according to Aaron Strutt of Trinity Financial, a mortgage broker.
Applications are permitted from people living in most major European countries, plus more distant locations including America, Japan, New Zealand and Singapore. The lowest rate on offer is a two-year fixed-rate deal at 3.95pc while a five-year fix is 4.25pc. Both options are subject to a 2pc arrangement fee.
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“Paragon will be one of the biggest lenders and provide some much needed competition,” Mr Strutt said.
“Many of the large lenders are not really interested in the expat market and mortgages tend to be available through the smaller building societies and specialist lenders.”
Unlike some rival lenders, Paragon does not require that an applicant work for a multinational company, or specify a minimum income. Applicants can be either employed or self-employed.
Mr Strutt added that Family Building Society, Kent Reliance and Marsden Building Society were currently the favoured lenders for expats. The latter offers a two-year variable rate mortgage at 2.99pc, with a low 0.6pc arrangement fee.