Mortgage interest rates for immigrant

oj.bulmer

Hi,

I am currently on a work visa and will be eligible for settlement in UK in 3 years. So far I have been using shared accommodation but want to move into a separate flat. I realize that if I stay in a one bed flat I have to shell out close to £750 (£500 rent, £250 for council tax and bills).

Now, if I buy a flat, say worth £100,000 instead, the monthly mortgage payment comes to arond £350-£400 (versus £500 rent).

I was wondering if it is worth buying the flat instead of paying rent, which is a dead money anyway. But then being an immigrant, I think I may be told ridiculously high interest rates to pay.

Mind you, I currently have a credit card and my noddle rating is 4/5 (I know this is useless but at least indicative of a clean credit history..i.e. no defaults/bankruptcy/CCJ etc)

Can I have some guidance on whether to rent a flat or go for a mortgage? And if latter choice is more reasonable, what would be typical interest rates I may be told?

Thanks

amnblog

No-one charges you extra for not being a permanent resident - although many lenders will say no with permanent right to reside.


The interest rate you pay depends on the deposit funds you have to put down and I suspect that may be the biggest issue.

ACG

The pool of lenders will reduce though, which in turn usually means higher rates - but as above its not a given you will pay more.

I think its worth you finding a specialist broker, I have had a case like this and trying to place it was a complete nightmare. In the end we managed to do it at high street rates but only because something clicked into place a week after they came to see me.

Anything like this speaking personally I would not take on again as I really would not have a clue on where to go with it.

kingstreet

As amn said, if you don't have ILR you'll find many lenders won't lend to you until you do.

Best route is probably a 25% deposit or more and a mortgage from the high street lenders who relax their requirements for a mortgage under 75% LTV.

amnblog

KS is right about deposit.


We do numerous cases like this as with specialist in Doctors, many of which are on visas.


Some lenders will consider a mortgage above 75% loan to value (up to 85%) on a visa but the majority limit at that level.

Foxy-Stoat_3

If you do your sums then your rent is not 100% dead money.

Saving up £25,000 cash for a deposit, factor in the interest.
Legal and mortgage application fees £1000-£2000.
Round rent and maintenance payments for 25 years (assuming you will live there that long) could be anything from £1,000 to £3,000 a year.
Extending the lease when you come to sell £10,000-£15,000 (guess)
Money you will spend on maintaining the flat, decorations, replacing boiler and other items normally responsible by the Landlords.

I would say renting is 40-50% dead money, assuming you are able to save enough to get the required deposit and fees to buy a place.

maninthestreet

oj.bulmer - is £100,000 a realistic price for a 1-bed flat in your part of the UK?