Yes, Americans can get a mortgage in England. But here’s what you need to know before you start searching for that dream cottage in England.
Many Americans considering a move abroad often wonder if they can secure a mortgage in England for that perfect Victorian terraced house or idyllic cottage in the countryside. I was certainly one of them.
However, when I met with a UK mortgage lender, we were both surprised by the stark differences between UK and US mortgage processes.
While it is legal for Americans to obtain a mortgage in England, there are key factors to understand before diving into your home search.
1. Your US Credit Does Not Transfer to England
Every country has their own system for evaluating creditworthiness, and these systems are not connected globally.
So, even if you’ve spent years building your credit in the States, when you move to England, you’ll be starting from scratch.
In most cases, it will take many months-or even years-to build credit in England. You will likely need to take specific steps before you’ will be’re offered the best rates mortgages (or any at all!).
When we first arrived in England, I tried to build my credit by applying for a credit card from my UK bank. Even with a low credit limit and a healthy cash balance in an account with them, I was denied!
The banker advised me to come back after six months, once I could demonstrate a solid payment history on other accounts.
Also, remember…..even though your credit doesn’t follow you to England, your debt does!
2. Home Buyers Rarely Have a Dedicated Agent
Real estate agents, as we know them in America, do not exist in the UK.
When buying a home in America, you typically have a real estate agent who shows properties, writes contracts, and negotiates on your behalf.
However in England, sellers will generally have an agent, but buyers rarely do.
If you’re interested in a property, you’ll need to reach out to the seller’s agent to schedule a showing. Don’t expect a quick turnaround; it can take days to secure an appointment, especially if the seller is on holiday.
When you arrive for the showing, the seller’s agent may be there, but more often than not, it’s the seller themselves—or even a family member like Uncle Bob—who will show you around. You never quite know who will be there!
At first, I found this a bit awkward. I wanted to thoroughly explore the homes—peek into cabinets and check behind doors—but with the seller present, it felt rude to do so. Being in a new country with unfamiliar homes and building practices, I missed having someone on my side to answer my questions.
Over time, though, I actually came to appreciate meeting the sellers. Many were eager to share insights and answer questions, often providing more information than an agent might have. It turned out to be a unique and valuable part of the home-buying experience.
3. Beware of Gazumping and Gazundering
One of the most stressful parts of the home-buying process in the US is waiting to hear if your offer has been be accepted by the seller.
Things can still go awry later in the process, but most buyers feel a sense of relief once they are “under contract”. If all goes well with inspections and appraisals, the house will be theirs to purchase.
Unfortunately, in England, that relief is short-lived.
Even if a buyer has their offer accepted, the seller can still accept a higher offer from someone else. This means the first buyer can be pushed out of the deal and forced to start all over again.
This whole nightmare is called “gazumping”, and yes, it is legal. In fact, in 2024 37% of UK homebuyers reported being gazumped!
As if that wasn’t enough, Americans looking to buy a home in England also must be aware of gazundering. This occurs when the seller lowers the price of the property just before you sign the final contracts, forcing you to either pay the lower price or walk away from the sale.
Only the British could make something so stressful sound so jolly!
4. 30-Year Fixed Rate Mortgages Are Not the Norm in England
I took for granted that when you buy a home in America, you can lock in that interest rate for 30 years. If rates drop, you have the option to refinance, making your payment even lower.
In England, however, 2-year and 5-year fixed-rate mortgages are the norm. Some Brits with good credit might go for a 7-year or 10-year fixed rate.
Once the fixed-rate period ends, you typically move onto the Standard Variable Rate, or consider remortgage (refinance).
Only in recent years have 30-year fixed rates become available in the UK market. If you’re an Amercian expat living in England, it’s important to consult a lender to find out what mortgage products are available, especially if you’ve lived in England for less than three years.
5. There is an Age Limit
Many Brits are surprised to learn that in America, you can take out a 30-year mortgage even at the age of 102! This is thanks to the Equal Credit Opportunity Act, which prevents lenders in the States from discriminating based on age.
In the UK, however, mortgage terms typically last only until you turn 70 or reach your retirement age, whichever comes first. When we moved to England, I was 45, so the longest mortgage term I could secure was 25 years.
This limitation can significantly decrease the length of your term and increase your monthly payments, making it an important factor to consider as you start your home search—especially if you plan to retire in England!
While many Americans expats will be able to secure a mortgage in England, it’s essential to consult a mortgage lender to fully understand your options.
Have any questions or comments? Feel free to drop them in the comments below!
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