If you’re an EU citizen living in the UK with pre-settled status, you might be wondering whether you can get a mortgage – and if so, how much deposit you’ll need. The good news is, you do have options, but there are some unique considerations you need to be aware of. This guide walks you through the essentials of deposit requirements for EU pre-settled status mortgages in the UK, using clear, straightforward language.
What Is Pre-Settled Status?
First, let’s clarify what pre-settled status means. Since Brexit, EU, EEA and Swiss citizens who were living in the UK before the end of 2020 had to apply to the EU Settlement Scheme to secure their right to remain. If you’ve not yet lived in the UK for five years, you’ll usually have pre-settled status, which allows you to stay for up to five years, after which you can apply for settled status.
Can You Get a Mortgage with Pre-Settled Status?
Yes, you can. Most high street banks and many specialist lenders will consider mortgage applications from those with pre-settled status. The key is to prove your right to live and work in the UK and meet the standard mortgage lending criteria.
What Deposit Will You Need?
Here’s where things get a little more complicated. Technically, deposit requirements for EU citizens with pre-settled status are much the same as for British citizens. However, lenders may see you as higher risk, particularly if you’ve not been in the UK long, have limited credit history, or unstable income.
Typical Deposit Amounts
- Standard Mortgages: If you have a good credit record and stable employment, some lenders might offer mortgages with as little as a 5-10% deposit.
- More Likely Scenario: Many lenders will want at least a 15% deposit from applicants with pre-settled status, particularly if your UK credit history is limited.
- Special Circumstances: If your income is irregular, or you’re self-employed, you might be asked for 20% or more.
Why Do Deposit Requirements Vary?
Lenders want to minimise their risk. If they’re unsure how long you’ll be staying in the UK, or if you don’t have a long history of working and living here, they’re more likely to ask for a bigger deposit. This gives them more security in case they need to recover the loan.
Why Do Deposit Requirements Vary?
Lenders want to minimise their risk. If they’re unsure how long you’ll be staying in the UK, or if you don’t have a long history of working and living here, they’re more likely to ask for a bigger deposit. This gives them more security in case they need to recover the loan.
Improving Your Chances
If you’re keen to get a mortgage with a smaller deposit, here are some tips:
- Build Your Credit History: Register to vote, set up UK bank accounts, and use credit responsibly.
- Show Stable Employment: Lenders prefer applicants in permanent jobs, ideally with at least six months’ history.
- Save a Bigger Deposit: The more you can put down, the wider your choice of lenders.
- Consider a Joint Application: If you have a partner or relative with settled status or British citizenship, applying together can help.
Specialist Lenders
If high street banks turn you down, don’t give up. There are specialist mortgage brokers and lenders who regularly help EU citizens with pre-settled status buy property in the UK. These firms are more used to dealing with unusual circumstances, though they may charge higher interest rates or fees.
FAQs
Yes, it’s possible. While some lenders prefer applicants with a longer UK residency history, others are more flexible. If you can demonstrate financial stability, such as consistent income and a good credit history, your chances improve.Working with a mortgage broker experienced in pre-settled status cases can help identify suitable lenders for your situation.
Not necessarily. Interest rates are generally based on factors like deposit size, income, and credit history rather than immigration status. However, some lenders may offer slightly higher rates to applicants they perceive as higher risk. It’s advisable to compare offers from multiple lenders or consult a mortgage broker to find the best rates available to you.
Yes, some lenders accept a 5% deposit from applicants with pre-settled status, especially if you meet other criteria like stable employment and good credit. However, your options may be more limited compared to applicants with settled status or indefinite leave to remain. A mortgage broker can assist in finding lenders who are open to low-deposit applications from individuals with pre-settled status.
While some lenders may require a larger deposit from applicants with pre-settled status, others treat such applications similarly to those from UK nationals. The required deposit can vary depending on the lender’s policies and your individual circumstances. A larger deposit often leads to better interest rates and more flexible repayment terms.Consulting a mortgage broker can help you understand the specific deposit requirements for your situation.
To apply for a mortgage with pre-settled status, you’ll typically need:
1. Proof of income (e.g., recent payslips or tax returns)
2. Bank statements
3. Proof of deposit
4. Identification (e.g., passport)
5. Evidence of your pre-settled status, such as a share code from the EU Settlement Scheme.
Providing these documents helps lenders assess your financial stability and right to reside in the UK.
Yes, many lenders consider buy-to-let mortgage applications from individuals with pre-settled status. However, the criteria can be stricter compared to residential mortgages. Typically, you’ll need a larger deposit (often around 25%), and some lenders may require you to have owned a property before. Additionally, there may be minimum income requirements to ensure you can cover mortgage repayments.
If you’re applying for a mortgage jointly and only one of you has pre-settled status, some lenders may apply restrictions or require additional documentation. However, many lenders will consider the combined circumstances of both applicants. It’s important to consult with a mortgage broker who can guide you to lenders that are accommodating in such situations.
Waiting until you have settled status or indefinite leave to remain might open up more lending options and potentially better terms. However, it’s not always necessary. Many lenders accept applications from individuals with pre-settled status, especially if other aspects of your financial profile are strong. Delaying your application could mean missing out on current market opportunities.
Generally, the rules regarding pre-settled status apply similarly to first-time buyers, home movers, and those looking to remortgage. However, specific lender criteria can vary depending on the type of mortgage and individual circumstances. It’s advisable to seek guidance tailored to your particular situation.
Obtaining a mortgage with bad credit and pre-settled status can be challenging, but it’s not impossible. Some specialist lenders are willing to consider such applications, especially if you can demonstrate efforts to improve your credit and have a stable income. Working with a mortgage broker experienced in handling complex cases can increase your chances of approval.
Continue Reading
How to get a mortgage with 1 years’ accounts
Self employed mortgage 2 years accounts
Mortgage brokers first-time buyers London
Self-employed mortgages London
How do you buy someone out of a mortgage?
Can you add someone to a mortgage?
Single brick construction mortgage
How much can I borrow for a mortgage?
Mortgage with a gifted deposit
Joint mortgage with bad credit
Are you a first-time buyer if you’ve only been added later to an existing mortgage?
Can you be a first-time buyer again?
Can you get a mortgage with a guarantor?
Can you be a first-time buyer again?(Opens in a new browser tab)
Can I get shared ownership mortgages with bad credit?
First-time buyer mortgages London
Bad credit mortgage brokers London