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Seafarer mortgages

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Feb 6, 2023

Fact Checked By:
David Nicholson - Finance Editor

Mortgages for seafarers and offshore workers for UK property mortgages

If you are looking for future property finance, we can give mortgage advice free of charge with a specialist mortgage advisor.

Getting a mortgage in the UK can be challenging, and you won’t be able to access all the best mortgage deals without a mortgage broker. This is especially true when looking at mortgages for seafarers. A seafarer mortgage is possible with the right mortgage broker’s advice and support.

When looking at mortgages for seafarers, you need to ensure that your tax affairs are in order. We also provide information about proving residency. You will need to show where your foreign currency salaries are paid if it is not a UK bank account.

To begin your seafarer mortgage application click the link below.

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What is a Seafarer Mortgage?

A seafarer mortgage is a form of property finance tailored to the needs of those working in this field. UK mortgages for seafarers are slightly different from residential mortgages and they are a good choice between domestic and expatriate rate mortgages.

Seafarers’ unions reached an exclusive tax arrangement with HMRC in 2012. Seafarers can now claim an exemption from foreign earnings through HMRC’s Seafarers Eligibility Deduction (SED). Seafarers spend substantial time abroad and don’t use many of the services their UK tax would cover. They work in a highly competitive labour market.

How the SED can impact your mortgage prospects

While seafarers may not be taxed on their earnings in foreign currencies, they must still file an annual UK tax return to claim the SED exemption. This will allow you to keep your UK residence and qualify for a UK mortgage.

It can be difficult to convince both a tax office and a mortgage lender that you are eligible for this treatment.

You will need to retain all evidence related to your travels and visits to the UK if you spend less than half of the year (183 days) in the country during a UK tax year.

To be eligible for a non-expatriate UK mortgage, you must show that you have a UK resident home where you can live for at least 91 consecutive days. This is also your postal address. You would also have a UK credit rating.

Factor in insurance costs

The higher homeowner insurance cost is one issue seafarers will face once they reach the property ladder. Your insurance may be cancelled if your house is not occupied for a long time.

If you have evidence that your family or friends can regularly check on your home while you are away, a specialist broker may be able to help you avoid this fate. Seafarers are considered riskier than other occupations, and insurance such as critical illness coverage can be higher.

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How to get a mortgage for a seafarer

Seafarers will need to approach things differently than other mortgage customers; the application will differ slightly from the UK regulatory regime. Firstly click the link below to speak with a mortgage advisor who is regulated by the financial conduct authority.

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It is crucial to have all of your income and tax information together. It may be necessary to prove you are a UK resident.

A specialist in seafarer borrowers mortgage brokers will be able to help you organise your affairs for your mortgage application and determine what information you should give.

Find out if you are eligible.

There will be different criteria to gain approval from each provider. Our brokers, regulated by the Financial Conduct Authority, can help you understand the requirements.

Some mortgage lenders use the below criteria to approve seafarers:

  • For tax purposes, the applicant must be a resident of the UK – even if they use the seafarers’ allowance to offset their tax liability.
  • All income must be received and paid in pounds. Some mortgage companies require payslips for the last three months. Your three most recent tax overviews and calculations may be required if you are self-employed.
  • The applicant must be able to reside permanently in the UK legally.
  • The applicant must reside in the UK for at least six months.
  • Underwriters may require seafarers to consent to additional scrutiny.
  • Candidates must be employed in the UK or internationally.

It is worth noting, however, that seafarer applications will be evaluated by lenders on a case-by-case basis. Therefore, the above won’t necessarily apply.

An appointed representative specialising in seafarer mortgages is the best way to avoid being caught by lender restrictions. They will be able to tell you which lender is most likely to approve your application and show you the best mortgage products to suit you.

It’s easy to think that the criteria listed above are complicated. Talking to a specialist in seafarers should simplify the process. To learn more about how your creditworthiness and documents will be evaluated and what documents you will need, visit our complete guide to mortgage applications.

What about a member of a yacht crew?

There are few differences in mortgages for yacht crew members or other seafarers. All seafarers can benefit from the information.

Some yacht crew members prefer their foreign currency salary paid to offshore limited companies. This may be a tax-efficient solution or tax-free earnings, but it could have severe consequences for property financing in the future.

An offshore bank account may be better than hiding your tax-free income from the UK tax authorities. This can help you to negotiate with HMRC.

Offshore accounts are more expensive and don’t pay interest. They don’t affect your UK credit score. Although obtaining a mortgage may be more challenging if you bank offshore, there are still options.

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Expatriate mortgages vs domestic seafarer mortgages

There are two main differences between domestic and expatriate mortgages: the cost and additional checks that the lender will perform before they approve your application.

Expat mortgages can have higher interest rates, and lenders may not offer financing in these cases because the risk is higher. Customers from overseas could be expelled more quickly if they default on their mortgage. Lenders are also less likely to verify a non-UK resident’s income or tax status.

Customers who are seafarers and do not qualify for an expatriate loan can still apply. We have expat mortgage brokers that can help you and guide you in the right direction. They will introduce you to a non-expatriate mortgage lender who offers these mortgage products.

Speak with a broker that specialises in seafarer mortgages

From reading the above, we know seafarers can get a mortgage. However, without the help of a professional, it can be complicated or even impossible.

A mortgage broker can advise you on how much deposit you may need, how repayments on your mortgage work and what lending facilities are available to you depending on your circumstances.

Ensure you have the correct tax returns and choose the right person to provide mortgages to suit you. The good news is that we can do all this for you when you click the link below.

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