A family that bought a London flat with cash in 2015 owns an asset worth, say, £1,500,000 that produces nothing but rent and can be borrowed against. A non-resident can remortgage a London property at 60 to 70 per cent of its value with the international and specialist lenders, or refinance on a Sharia-compliant basis. The terms are tighter than a resident’s and the tax on the interest is not what owners expect; decide on the arithmetic, not the availability.
Finance
Remortgaging a London property as a non-resident: releasing equity, refinancing a bridge, and what the lender asks
Why a non-resident might remortgage a London property
A non-resident who owns a London property can remortgage it at 60 to 70 per cent of the lender’s valuation if it is let, or 50 to 65 per cent if the family uses it, through international, private, specialist or Sharia-compliant lenders. Rates run at base rate plus 1.5 to 3 per cent, arrangement fees at 1 to 2 per cent, and a non-resident application takes eight to twelve weeks. The catch: interest relief is only a 20 per cent tax credit, and only on borrowing used for the property business.
Three reasons the firm sees. To release equity from a property bought with cash, usually to buy a second property in the UK without sending more money from the Gulf. To refinance a bridging loan taken to complete quickly, after an auction or a purchase with a short deadline, onto a term loan at a fraction of the rate. And to replace an expensive or expiring product with a cheaper one, which for a non-resident is a smaller market than for a resident but exists.
A fourth reason, to take money out of the UK for a purpose at home, is possible and is the one where the tax rules bite hardest.
Which lenders remortgage London property for non-residents
The international arms of the UK banks (HSBC Expat, Lloyds International, Barclays International), the private banks for larger sums, and specialist buy-to-let lenders that accept non-resident borrowers, all lend against a let property to an owner in the Gulf; a handful of mainstream lenders do so for borrowers in specific countries with a UK credit history.
Remortgaging a family-used London property with private and Islamic banks
For a property the family uses rather than lets, the choice is narrower: the private banks and the international arms, on a relationship basis, with assets under management or a deposit held. Al Rayan Bank and Gatehouse Bank refinance on a Sharia-compliant basis for both let and family-used property. A broker who places non-resident cases every week is the route; the firm introduces and does not receive a fee.
Typical non-resident remortgage terms in 2026
The typical terms the firm sees in 2026:
Non-resident remortgage terms, 2026
| Typical 2026 terms for a non-resident remortgage | Let property | Family-used property |
|---|---|---|
| Loan-to-value | 60 to 70 per cent | 50 to 65 per cent |
| Rental cover | Rent must be 125 to 145 per cent of the interest at a stressed rate | Not applicable; affordability on income and assets |
| Rate | Base rate plus 1.5 to 3 per cent, fixed or tracker | Private-bank pricing, often with a relationship requirement |
| Term | 5 to 25 years, interest-only common for let property | 5 to 25 years |
| Minimum loan | £100,000 to £250,000 | £500,000 to £1,000,000 at the private banks |
| Documents | Identity, address, source of wealth, six months’ statements, the tenancy agreement, the agent’s statements, a valuation | The same plus income evidence and the wealth statement |
Source: Bank of England Bank Rate and Al Rayan Bank published terms; firm’s observation of typical lender terms, October 2026.
The valuation is the lender’s, at the owner’s cost, and sets the figure the loan-to-value is applied to; a lender’s valuer in a falling market, which London’s inner boroughs have been in 2026 as our market note explains, values conservatively, and the loan is smaller than the owner’s own estimate of the flat’s worth.
How to refinance a bridging loan with a remortgage
A bridging loan at 0.7 to 1 per cent a month, taken to complete at auction or to beat a deadline, must be replaced within its term, usually twelve months, by a term loan. The remortgage application should start the week the bridge completes, not the month it expires, because a non-resident application takes eight to twelve weeks, the valuation must be instructed, and a let property needs a tenant in place for the rental cover.
A bridge that runs over its term carries default interest at double the rate and, in the end, the lender’s sale. Our guide on buying at auction from abroad sets out the sequence; the rule is that the exit from the bridge is arranged before the bridge is taken.
Remortgaging a London property through Sharia-compliant home finance
Al Rayan’s and Gatehouse’s buy-to-let purchase plans and home purchase plans can refinance an existing property: the bank buys a share of the property from the owner (releasing the equity) and the owner pays rent on the bank’s share while buying it back over the term, on a diminishing musharaka basis. The deposits, rental rates and documents are as in our guide on Islamic home finance; the stamp duty relief for alternative finance means the bank’s acquisition of its share is not taxed. For a family-used property, the home purchase plan is available to a non-resident for a second home on a relationship basis.
Mortgage interest tax relief for non-resident landlords
An individual landlord does not deduct mortgage interest from rent; since 2020 the relief is a tax credit of 20 per cent of the interest, set against the tax on the rental profit.
Interest relief only up to the first-let value
That credit is available only for interest on borrowing used for the property business, and only up to the value of the property when it was first let (plus later improvements): a remortgage that releases equity up to that value to buy a second let flat keeps the relief on all of the interest; a remortgage that releases equity beyond that value, or that is used to buy a villa in Dubai or fund a business in Jeddah, loses the relief on the excess.
Mortgage interest relief for company landlords in the UK
A company landlord deducts interest in full as a business expense, which is one of the real arguments for the company structure for a portfolio, as our guide on holding through a company explains. Our guide on tax on rent for overseas landlords covers the rest of the return.
Remortgage costs and early repayment penalties for non-residents
Arrangement fee, 1 to 2 per cent of the loan, often added to it; valuation, £500 to £2,000; legal fees for the lender’s and the owner’s solicitors, £1,000 to £2,500; broker fee, £1,000 to £3,000 or a percentage; and, on the product being replaced, an early repayment charge of 1 to 5 per cent of the balance during a fixed period, which on a £700,000 loan is up to £35,000 and is the figure that decides whether to refinance now or at the fixed period’s end. A remortgage also restarts the lender’s consent conditions on letting, short lets (forbidden), and occupation by the family (usually forbidden on a buy-to-let product).
When remortgaging a London property makes sense for non-residents
Releasing equity from a let flat to buy a second let flat, so that the rent on both covers the interest and the relief is kept: sensible, and the way a family’s UK portfolio grows without further transfers from the Gulf. Refinancing a bridge: necessary, and planned before the bridge. Replacing a product at the end of its fixed period: sensible if the saving exceeds the costs.
Releasing equity to spend abroad or buy more property
Releasing equity to spend at home: possible, at the loss of interest relief, and in the firm’s view rarely better than borrowing at home against home assets, where the rates and the tax are the family’s own. Borrowing against a family-used London house to buy more London property: the private banks will do it, and the family should model the cost as if the house were sold, because that is what the borrowing is.
Sources: Tax relief for residential landlords: restricting finance cost relief (GOV.UK) · Non-Resident Landlord Scheme (GOV.UK) · Al Rayan Bank · Bank of England: Bank Rate Figures verified 14 October 2026.
Frequently Asked
Questions about remortgaging as a non-resident
Yes, at 60 to 70 per cent of its current valuation if it is let, with the rent covering the stressed interest; the lender’s valuation, not your estimate, sets the figure.
As a 20 per cent tax credit, on borrowing used for the property business up to the property’s value when first let; interest on money taken out for other purposes gets no relief.
Eight to twelve weeks from a complete application, longer if documents need certifying abroad; start before a bridge’s term or a fixed period ends, not after.
Yes, but the market is narrower: the private banks and the international arms, on a relationship basis with assets under management or a deposit held, at 50 to 65 per cent loan-to-value, with minimum loans of £500,000 to £1,000,000 at the private banks. Affordability is assessed on income and assets rather than rent. The family should model the cost as if the house were sold, because that is what the borrowing is.
On a let property, base rate plus 1.5 to 3 per cent, fixed or tracker, over 5 to 25 years, with interest-only common; the rent must be 125 to 145 per cent of the interest at a stressed rate. On a family-used property, private-bank pricing, often with a relationship requirement. Minimum loans on let property are £100,000 to £250,000.
An arrangement fee of 1 to 2 per cent of the loan, often added to it; valuation £500 to £2,000; legal fees for the lender’s and the owner’s solicitors £1,000 to £2,500; and a broker fee of £1,000 to £3,000 or a percentage. The valuation is the lender’s, at the owner’s cost, and a valuer in a falling market values conservatively, so the loan is smaller than the owner’s own estimate.
During a fixed period, usually 1 to 5 per cent of the balance, which on a £700,000 loan is up to £35,000. That figure decides whether to refinance now or wait for the fixed period to end, since replacing a product is only sensible if the saving exceeds the costs. A remortgage also restarts the lender’s consent conditions on letting, short lets and family occupation.
Yes. Al Rayan Bank’s and Gatehouse Bank’s buy-to-let purchase plans and home purchase plans can refinance an existing property: the bank buys a share of the property from the owner, releasing the equity, and the owner pays rent on the bank’s share while buying it back over the term on a diminishing musharaka basis. The stamp duty relief for alternative finance means the bank’s acquisition of its share is not taxed. Our Islamic home finance guide gives the deposits and rates.
Possible, but the interest on money taken out for a villa in Dubai or a business in Jeddah gets no 20 per cent tax credit against UK rental profit. In the firm’s view it is rarely better than borrowing at home against home assets, where the rates and the tax are the family’s own. Releasing equity to buy a second let flat, so the rent covers the interest and the relief is kept, is the sensible use.
For a let property: identity, address, source of wealth, six months’ statements, the tenancy agreement, the agent’s statements and a valuation. For a family-used property, the same plus income evidence and the wealth statement. Allow eight to twelve weeks from a complete application, longer if documents need certifying abroad, and use a broker who places non-resident cases every week; the firm introduces and does not receive a fee.
