Mortgages for seafarers and yacht crew
For seafarers and yacht crew, securing a mortgage in the UK can feel like navigating choppy waters.
Your unique income patterns, tax statuses, and residency challenges come to the fore. So much so that traditional lenders may be reluctant to consider your application.
However, with the support of our expert broking team, home ownership is very much on the horizon.
What is a seafarer mortgage?
A seafarer mortgage is a mortgage tailored to meet the specific needs of people working at sea.
They bridge the gap between standard residential mortgages and expatriate mortgages. This means accommodating unique factors, like foreign currency earnings, irregular income patterns, and extended periods away from the UK.
Seafarers can qualify for these mortgages if they meet certain criteria. These criteria include maintaining UK residency ties and qualification for the SED tax regime.
How much can I borrow on my day rate?
Mortgage challenges faced by seafarers and yacht crew
Lenders often perceive seafarers as higher-risk borrowers. This is often due to challenges in contacting them while at sea and concerns about affordability during periods of absence or currency fluctuations. These issues include:
Verifying income
Seafarers' income often fluctuates due to the time spent at sea versus onshore leave.
Tax-free income
Seafarers who are out of the UK for more than 180 days a year could be non-UK tax payers. They would then benefit from a seafarer tax exemption known as Seafarers’ Earnings Deduction (SED).
Claiming SED can complicate income verification as some mortgage lenders favour applicants who pay UK taxes.
Foreign currency earnings
Many seafarers are paid in foreign currencies, which introduces the issue of exchange rate volatility. Lenders will often use an average or worst-case exchange rate from previous years. Or they could discount your sterling equivalent income by a set percentage, for example 20%.
Both could drastically reduce previous years' income for mortgage affordability purposes.
UK residency requirements
Lenders can require applicants to spend at least six months per year in the UK. This would be challenging for those who spend extended periods at sea.
UK residency documentation
Proving UK residency when not actively in the country requires meticulous documentation. This could include travel histories and electoral registration records, which some lenders might insist upon seeing.
Offshore banking issues
Income deposited into offshore accounts may not be considered by some lenders for affordability assessments. Again, this could dramatically affect perceived mortgage affordability.
How can mortgage terms differ for seafarers?
Seafarers can access standard mortgage types (e.g., fixed-rate or buy-to-let). But, the terms often differ due to seafarers’ unique circumstances:
Deposit requirements
Residential mortgages typically require a deposit of 10%; some lenders may accept 5% for sterling-paid applicants. For foreign currency earners or buy-to-let properties, deposits of 20–25% are more common.
Loan-To-Value (LTV) ratios
Lenders may cap LTV ratios at 80% for foreign currency earners, meaning a minimum deposit of 20%. That’s compared to up to a 95% cap (5% deposit) for people paid in GBP by UK-based employers.
Interest rates
Due to perceived risk, interest rates for seafarers may be slightly higher than those lenders offer to more traditional borrowers.
Prove your income for a successful application
As a seafarer, proving your income to lenders will be crucial for a successful application. Be prepared to provide detailed documentation, such as:
For employed seafarers (PAYE)
Your last three months’ payslips, latest bank statements and discharge book (where applicable).
For self-employed seafarers
Two years of accounts, your tax calculations and your latest SA302.
Additional documents may include:
Your employment contract, a copy of your CV, and proof of savings for your deposit.
Speak to our specialist broking team
Talk to the experts in seafarer mortgages
Given the complexities of seafarer mortgages, working with a specialist mortgage broker (like us) is highly recommended. Our specialist broking team will:
- Listen carefully to your requirements, and get to work to secure the mortgage you deserve
- Identify the right lenders: those who are receptive to seafarer mortgage applications
- Help prepare your application and meticulously gather the necessary documentation
- Negotiate on your behalf to secure the best possible terms for your unique circumstances
- Respond promptly to any questions you have, and keep you fully informed of progress at all times
Tailored solutions for every stage of your seafarer mortgage journey
Our experienced brokers specialise in providing mortgages that suit every stage of your career offshore.
Whether you're taking your first step onto the property ladder, moving home, remortgaging or expanding your portfolio, our award-winning team is here to help.
As an independent broker with more than 20 years' experience, seafarers and yacht crew will benefit from our expertise and unbiased advice.
Ready to take the first step?
While securing a mortgage as a seafarer might seem daunting, it’s achievable with our support.
Expect thorough preparation of your application and unrivalled guidance from our expert broking team. With these, you can successfully navigate the mortgage market and drop anchor in your dream UK home.
Call us now: 020 8421 7999 or fill in the form to start your journey.
