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Mortgage Affordability When Already Have A Mortgage Abroad

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I'm looking to purchase a flat abroad (relatively cheap compared to London prices, probably something at about 150kE)

I probably wouldn't use the flat much for the first few years so would probably deal with a lettings agent to rent it out. Understandably, I don't expect the flat to pay for itself and am willing to accept that there may be long periods where my rental income is not that high.

I'm actually far keener at buying this place than buying in London right now, even though I have more than enough to put down a 20-25% deposit for the kind of place I would be looking for in London.

However, once I've paid the deposit for the place abroad and paid the various charges, I'd expect to be down about £30-40k down and of course, as mentioned, I'd expect to have to accept significant outgoings.

If I then approach a UK lender at some point in the future, how will this affect my affordability for a mortgage?

I would expect to still have a decent deposit (especially if I looked to buy 1-2 years or more after buying the flat mentioned above) but how would the mortgage payments abroad be taken into account? Would it simply be a case of them looking at the net difference between mortgage payments and rental income or would rental income not be taken into account? So with £500 mortgage payments for the flat abroad, is that by how much the payments for any UK mortgage I'd be offered would be reduced? i.e. if right now a bank would offer me a mortgage with payments of 1k, if I bought the flat, they wouldn't consider any mortgage that would result in mortgage payments of more than £500?

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  • 244 Brexit, House prices and Summer 2020

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