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Pre-Settled Status Mortgage

Searching for a mortgage as a foreign national? Learn all about pre-settled status mortgages, how to apply for them, and the conditions that apply to these mortgages.
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If you are a foreign national living in the UK, then you may be aware of the difficulties surrounding mortgages for people of pre-settled status.

According to the Immigration Advice Service, approximately 10.3 million people live in the UK who were not born in the country. These people, accounting for a massive 14.8% of the total population, may qualify for a pre-settled status mortgage should they fit the eligibility criteria.

Here’s a complete overview of pre-settled status mortgages and how to approach the application process.

What is Pre-Settled Status?

What is Pre-Settled Status

“Pre-settled” refers to one of the two immigration-related status terms provided to people who intend to live in the UK for a limited period of time. 

The other term is “settled”, which refers to immigrants who have full rights to reside in the UK for as long as desired.

This scheme was introduced by the UK government to protect the rights of the citizens of the European Union, Switzerland, and the European Economic Area. The purpose of a pre-settled or settled status was to help those living in the UK transition during the Brexit era.

A pre-settled status is given to a citizen who has been living in the UK for less than five years. The status also protects them if they are working in the country for a limited period of time. 

Once they have lived in the country for a set period of time, they can enjoy the same rights as enjoyed by the settled citizens.

And after they have resided in the UK for five years, they can apply for settled status and potentially gain that status.

Pre-Settled Status Mortgage

Pre-Settled Status Mortgage

Once you acquire a pre-settled status, you may scour the market for mortgages in the hopes of getting a permanent home. 

Luckily, most lenders don’t object to pre-settled status mortgages and treat applicants the same way they would native British citizens or someone with the settled status. However this is very lender dependent. 

Of course, getting a pre-settled status mortgage has many layers to it, and rules and eligibility criteria for foreign national mortgages vary between lenders. 

This can be because of a lack of credit data in the country, which may make an applicant high-risk in the eyes of a lender. The resulting aversion is what may make getting a pre-settled mortgage difficult.

But if you have been residing in the UK for at least a few years, you may not face this difficulty at all. So long as you have a complete set of documents that includes your credit history, address history in the UK and more, the application process could be rather straightforward.

Note that complications can arise if you are married and only one of you has a pre-settled status, with the other being settled. 

Pre-Settled Status Mortgage Eligibility Criteria

There are three criteria to keep in mind while applying for a pre-settled mortgage: deposit, minimum income and property ownership. 

Fulfilling these requirements will improve your chances of getting a pre-settled status mortgage significantly.

Here’s a brief exploration of these criteria to help you prepare for a mortgage more efficiently.

1. Deposit Requirement

Property lenders typically require 20% of the property value, making the loan-to-value (LTV) ratio of a mortgage 80%. 

This number tends to fluctuate quite significantly, which depends on how sound your finances are and how long you have been living in the UK.

You may be able to find lenders who agree to a 90% LTV mortgage with a deposit requirement of just 10%. This is quite rare, but with the help of a specialist mortgage broker, you may be able to find the best deal, in very rare instances they may be able to find you a 95% LTV mortgage. 

2. Minimum Income

For most loans, lenders define a minimum income threshold that the applicant must meet to ensure that they don’t face a loss after lending the loan amount. 

More importantly, it is proof of your financial stability to the lender, which gives them a good idea of your affordability as well.

Lenders determine affordability through the loan-to-income ratio, which is the amount you are looking to borrow divided by your income (although there are more factors to consider than just this). 

3. Property Experience/Ownership

Certain lenders are more likely to offer you a mortgage if you either own a property or used to own one. 

While not necessarily required by most, owning a property can be an indication of your financial stability to the lender. It can increase your chances of getting a mortgage, if only by a little.

Documents Required For A Pre-Settled Status Mortgage

To meet the eligibility criteria set by the lender, you will be asked to provide documentation before the application process can begin properly. 

The list of required documentation is quite similar to UK citizens, so you don’t need to worry about pursuing additional steps.

Here’s a brief list of documents you need to gather when applying for a pre-settled mortgage:

  • Proof Of Identification: A passport or national ID card can be used as identification
  • Proof Of Address: Utility bills or bank statements to confirm your current address
  • Deposit: Bank statements or savings account statements to prove deposit
  • Proof Of Income: Pay slips, tax returns, or employment contracts may suffice
  • Residency Status Evidence: Residence permit, visa, or share code for EU nationals

This list can vary based on the lender, so be sure to check with your mortgage provider or broker before approaching them with the collected documents.

Pre-Settled Status Mortgage Application Process

Getting a pre-settled status mortgage is a simple but lengthy process that is largely the same as a normal mortgage application. 

Let’s go over each step in the application process briefly:

Step 1: Consult A Mortgage Broker

Many mortgage brokers specialise in helping clients with pre-settled status, and these brokers can help you find the best deals on the market. Consult them to find lenders who may be willing to provide you with a mortgage at low interest rates and a high LTV ratio.

Step 2: Gather Your Documents

Collect all the required documentation before you file an application to the lender. The list of required documents is outlined in the previous section.

Step 3: Weigh Your Options

Pick and choose which lender you would want a mortgage from with the help of your mortgage broker. 

Be sure to perform enough research and look into factors like repayment terms, additional restrictions and deposit requirements before applying for a loan.

Step 4: Obtain A Decision In Principle

A Decision in Principle (DIP) is an assessment from the lender that lets you know how much you may be able to borrow based on personal circumstances and is effectively a pre -screening of your application. 

This can be the deciding factor in the application process, so approach your lender for a DIP before you formally apply for a loan.

Step 5: Apply For The Mortgage

Once you’ve found the property of your dreams, file an application to the lender and attach all the necessary documents. Follow the procedure as instructed by the lender, and you will have your mortgage approved in no time all being well.


1. Is it more difficult for pre-settled status citizens to secure a mortgage?

As far as the overall application process goes, the challenges faced by pre-settled citizens are not too different from that of a settled citizen. However, pre-settled citizens may face difficulty in securing a mortgage if they have been living in the UK for a short while or have a poor credit history. Certain lenders may be most suitable

2. What is the borrowing limit for a pre-settled status mortgage?

The borrowing limit for a pre-settled mortgage in the UK is about four to five times the income of the applicant. For couples, the multiplier applies to the total income made by both members.

Of course, this can vary based on the credit history and affordability of the applicant which is the primary factor.

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.

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