Pre-Settled Status Mortgage UK
Pre-settled Status Mortgage UK
It is possible to buy a house with a pre-settled status mortgage in the UK. There are so many lenders available, with so it is worth doing the research to find out which are likely to be able to help with your personal situation. To save time and avoid disappointment it is best to work with a mortgage broker experienced in getting mortgages for people with pre-settled status, like me.
Read through the information below and then get in touch if you would like to start getting your mortgage sorted.
Last updated: 24th October 2023
Can I get a mortgage with pre-settled status?
Yes, absolutely. There are even lenders out there that will treat you the same as a British citizen, or somebody with settled status. You just need to make sure you approach the right lender as many will not grant mortgages unless you have indefinite leave to remain.
Other rules that vary between lenders are how long you have already lived in the UK, and how large a deposit you need.
What is pre-settled status?
Pre-settled status is granted under the EU Settlement Scheme. It gives EU citizens the right to live and work in the UK so long as they started living in the UK before the 1st of January 2021 (and applied for the scheme). It can lead to settled status and indefinite leave to remain. This Gov.uk website goes into more detail, but you should already be aware if you have pre-settled status.
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Why don't all banks have the same rules?
Some lenders will not lend to people without indefinite leave to remain as they are worried you may leave the country and not repay the mortgage. They also want you to have been in the country long enough to build up more credit data. Therefore, some banks will deem you as riskier and avoid lending to you.
How long do you need to have lived in the UK to get a mortgage?
You need to have been living in the UK since before 2021 to qualify for pre-settled status. As many lenders consider 6 months to be the minimum time required in the UK, this won’t be a problem for you. The longer you have been here the better chance you will have.
Some lenders require 3 years of UK address history so you may be ruled out by them. However, there are still lenders that will consider you without restrictions if you have only been in the UK less than 3 years. Some lenders need just one month.
What if only one of us has pre-settled status?
If you are applying as a couple and one of you has pre-settled status and the other has settled status, or indefinite leave to remain as a British Citizen, this will be acceptable for many lenders. Many lenders will apply restrictions if just one of you have pre-settled status though.
Deposits for pre-settled status mortgages
It’s possible to get a mortgage with pre-settled status with just a 5% deposit, including on a new build house or a non new build flat. New build flats need at least 10% deposit.
It varies from lender to lender though. Some banks and building societies will not consider you at all until you have a record of 3 years of living in the UK and have indefinite leave to remain. Others won’t consider you unless you have a 25% deposit.
By working with a mortgage broker experienced in this situation you will avoid wasted time, money, and disappointment. I would know the exact lender you would qualify with after just a few questions.
How much can you borrow for a pre-settled status mortgage in the UK?
able to borrow the same as a British citizen or somebody with settled status.
This will depend on your income and your commitments. Any individual lender would lend you the same regardless of your status, however, there are differences from lender to lender.
A rough guide is 4.5 times your income. That is your joint income if there are two of you. This will be reduced if you have large credit card debt, or monthly payments on personal loan or car finance. Children or other dependents can also reduce this. If you are buying a flat then significant ground rent and service charges can even reduce it.
It is possible to borrow more than 4.5 times your income. Some lenders will consider lending more if you have a high income, or a larger deposit. In some circumstances, it can be possible to borrow up to 5.5 times your income.
Are interest rates higher for people with pre-settled status?
Not really. You may not get the very lowest interest rate available,depending on the acceptance requirements, however the rate will not be much higher.
Should I wait until I have settled status or have indefinite leave to remain?
This strategy does not come with that many advantages. You might have a couple of extra lenders that you qualify with but any benefit would be small. It’s unlikely you will be better off paying rent for longer just to get a potentially fractionally lower-cost mortgage.
What documents are needed to get a mortgage with pre-settled status?
You will need to prove your income, deposit funds, right to live and work in the UK, expenditure, and occasionally a few other things.
As a minimum you’ll need to provide:
- Payslips for the last 3 months
- If you don’t have 3 payslips it can be possible to show your contract if you are in a new job
- Bank statements for the last 3 months
- Proof of your deposit, held in a UK bank account
- Your UK immigration status by providing a UK immigration share code using this service
- Passport
To make sure you get the best result I will also review your credit file and your general expenses.
Please be aware that by clicking onto the above link you are leaving the Jamie Thompson Mortgages website. Please note that neither Jamie Thompson Mortgages nor PRIMIS are responsible for the accuracy of the information contained within the linked site accessible from this page
Are the rules the same for first time buyers, movers, and remortgages?
Yes. Whether you are buying your first house ever, your first house in the UK, are buying a new house, or remortgaging or being added to a partner’s mortgage the lenders will treat your pre-settled status the same.
First time buyers will find my ultimate first time buyer guide useful.
Buy-to-let mortgages
The rules for buy to let mortgages with pre-settled status in the UK are roughly the same as residential mortgages. You’ll qualify with many lenders, but not all of them. You’ll typically need a 25% deposit but a 20% deposit is possible. This is the same for British citizens as well.
How much does advice cost for a pre-settled status mortgages?
For advice on getting a mortgage with pre-settled status I charge £390. This amount is paid at the start of the process, which involves reviewing all of your documents, ensuring you qualify for a mortgage, assessing how much you can borrow, submitting the mortgage application, and getting you a mortgage offer. If for some reason you don’t qualify this would be fully refunded.
There are fee free mortgage brokers available. I take on many cases free of charge if they are straightforward. However pre-settled status mortgages require a little more knowledge to get the best result. Check out my reviews on Google to see if my clients think I’m worth it.
Please be aware that by clicking onto the above link you are leaving the Jamie Thompson Mortgages website. Please note that neither Jamie Thompson Mortgages nor PRIMIS are responsible for the accuracy of the information contained within the linked site accessible from this page
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