If you’re looking to purchase property in Wales, you might wonder how mortgages work there; especially when the Welsh market is growing steadily.
While the differences might not be staggering, they are worth noting when looking for a mortgage.
In this guide, we’ll take a deep dive into mortgages in Wales and explain how you can take advantage of certain government schemes and use mortgage brokers to get the best deals.
It’s time to get started.
Table of Contents
- How To Get A Mortgage In Wales
- How Much Deposit Is Needed For A Welsh Mortgage
- What Is Help To Buy Mortgage In Wales?
- Wales Shared Ownership Mortgages
- How To Get Buy-To-Let Mortgages In Wales?
- Commercial Mortgages In Wales
- Frequently Asked Questions (FAQs)
- 1. Is remortgaging in Wales different from the rest of the UK?
- 2. What documents are needed to get a mortgage approved in Wales?
- 3. What is LTT, and how does it affect Welsh Mortgages?
- 4. Are Welsh mortgages regulated by the Financial Conduct Authority (FCA)?
- 5. Is the Wales property market more or less expensive than the rest of the UK?
How To Get A Mortgage In Wales
You shouldn’t face any problems getting a mortgage in Wales as long as you can meet the lender’s eligibility criteria. Both high-street and specialist lenders are available and offer Welsh mortgages.
Your monthly income is the most essential eligibility criterion, as it determines the amount of money you can borrow. This amount is usually 4-4.5 times your annual income, but you may be able get a better deal that offers up to 5-6 times your income.
If you’re getting a joint mortgage, then the combined salaries of all partners involved in the mortgage agreement will be considered.
Another crucial factor here is your credit history. While a spotless credit history will help you get the best deals, lower interest rates, and deposits, minor problems can often be overlooked by approaching the right lender for your circumstances.
However, the number of lenders who offer mortgages with bad credit is usually fewer, so you might have to search far and wide to get a good offer.
How Much Deposit Is Needed For A Welsh Mortgage
The amount of deposit you need to make will depend on your credit history. A clean credit rating will mean a smaller deposit is possible. On the other hand, a patchy one will require a higher deposit to reduce the lender’s risk.
However, we recommend putting down as much of a deposit as possible since a larger deposit means you’ll borrow less and pay less interest. In the long run, this will enable you to repay the mortgage earlier.
If eligible for specific government schemes, you can get mortgages with as low as a 5% deposit. Several private lenders have started offering 95% LTV mortgages as well. This provides you with a larger pool of options to choose from.
It’s essential to remember the guidance of specialist brokers, it may help save more in the long run by hiring a broker to help you with the mortgage.
You will also need an affordability assessment to prove to the lender that you can repay the loan.
What Is Help To Buy Mortgage In Wales?
Help To Buy is a government mortgage scheme in Wales that helps first-time buyers get on the property ladder with smaller deposits and affordable rates. Under this scheme, the government provides an equity loan for a portion of the property.
The advantage is that this loan is interest-free for the first five years and allows you to get a cheaper mortgage on the remaining value.
If you’re an eligible borrower in Wales, then you can get a loan up to 20% of the property’s market price. There are some limitations of this scheme, though, such as:
- Only new properties can be bought under this scheme
- The market value of the property shouldn’t exceed £300,000
In Wales, the present phase of Help To Buy has been extended till 2025 and will run till March of that year.
You can find a list of the participating lenders in the scheme on the official Help To Buy website.
Wales Shared Ownership Mortgages
This is another scheme to help those who don’t have as much upfront deposit to buy a property and get onto the property market.
Under this scheme, you can purchase between 25% and 75% of the property in Wales and pay rent on the remaining share. Only when you have enough money can you pay the remainder and own the rest of the home.
How To Get Buy-To-Let Mortgages In Wales?
Wales has a thriving buy-to-let market in the Cardiff and Swansea areas, where many lenders are available.
As with any other mortgage, these also come with their eligibility criteria, traditionally having higher rates and deposits.
Commercial Mortgages In Wales
If you’re looking to buy a property for your business in Wales, you’d need a commercial mortgage.
Remember that commercial mortgages are rarely standardised products and have a bespoke nature. So, it’s best to talk with a professional mortgage broker for the best deals.
Frequently Asked Questions (FAQs)
1. Is remortgaging in Wales different from the rest of the UK?
No, remortgaging rules in Wales are the same as in the rest of the UK.
2. What documents are needed to get a mortgage approved in Wales?
The following is a list of the documents you might need to get a mortgage in Wales:
- Driver’s licence or passport
- Details of current financial responsibilities
- Legal information on the property to be purchased
These are just some of the essential requirements. Every lender can have its own eligibility requirements, and we recommend you check them out carefully before entering into a contract.
3. What is LTT, and how does it affect Welsh Mortgages?
In Wales, LTT stands for Land Transaction Tax, replacing Stamp Duty Land Tax. It’s a tax paid when buying or leasing a building or land. LTT is part of the property costs, and borrowers must factor this into their mortgages and property purchase costs.
4. Are Welsh mortgages regulated by the Financial Conduct Authority (FCA)?
Yes, the FCA regulates any mortgage you take for a property purchase in Wales to protect customers’ interests.
5. Is the Wales property market more or less expensive than the rest of the UK?
The Welsh property market usually provides more affordable housing than other areas in the UK. However, in major locations such as Cardiff, the prices can be as high as other locations in the UK.
Your home may be repossessed if you do not keep up repayments on your mortgage.
All content is written by qualified mortgage advisors to provide current, reliable and accurate mortgage information. The information on this website is not specific for each individual reader and therefore does not constitute financial advice.
Our goal is simple – to provide most up-to-date and accurate mortgage information to make your mortgage journey as stress-free as possible. Have a question? Fill up the quick form and one of our mortgage advisor will connect with you.