Expats Best Placed to Pay off Mortgages Early

Lisa Smith, BA (Hons), CeFA

Having the ability to pay off a mortgage early can be something of a pipe dream for many.  After all, this is probably the biggest loan most people will take out in their lifetime.

However, for many expatriates, paying off a mortgage ahead of time becomes a reality, and brings with it an incredible sense of freedom, and the peace of mind of owning their home outright.

Expat advantages

According to Managing Director of deVere Mortgages, Mike Coady, expats can take advantage of their status in a variety of ways: “Typically, expats live in a low tax or tax free environment and earn a comparatively higher salary than their contemporaries ‘back home’.

“This allows them to save more each month and really makes their time working overseas count in financial terms.

“Of course, being sensible with regards to finances is key.  Earning a higher salary abroad, but deciding to spend it on fast cars and luxury holidays, rather than making the most of the low or inexistent taxes and good salaries to boost savings, could lead to disappointment down the line.

“deVere Mortgages has noticed that the majority of expats who are able to, opt to use their savings to pay off their mortgage early, affirming that there is no better feeling than being ‘debt-free’ when it comes to the family home.”

Mr Coady goes on to say: “Perhaps unsurprisingly, most of these individuals are located in areas such as Switzerland, Spain, Abu Dhabi, Dubai, Qatar and China.”

Surge in demand for expat mortgages

As confirmed by deVere Mortgages last month, there has been a “considerable surge” in mortgage enquiries from expats, particularly those living and/or working in the Middle and Far East.

In addition, the number of under-40s contemplating leaving the UK to start a new life abroad is also on the rise, as revealed by a recent deVere Group poll, with the most popular destinations being New York, Sydney, Johannesburg, Dubai and Hong Kong.

Mr Coady says: “Rather than perhaps the typical expat scenario of a move to the Costa del Sol or Australia’s Gold Coast to retire, we are seeing higher numbers of the working population making the move.

“Increasing living costs, high taxes and an unfavourable climate tend to be the most common push factors for people to exit Britain.

“Whereas, it can be reasonably assumed, the one common factor amongst expats, wherever their country of residence may be in the world, is they have a general sense of wellbeing.

“At deVere Mortgages, the majority of our expat clients say that as well as feeling far better off financially, they also feel more personally fulfilled.”

Mr Coady continues: “The so-called pull factors for this overall feeling of fulfilment are predominantly the higher salaries typically earned by expats, and the ability to use their expat status to their financial advantage.

“This, in turn, permits expats to be in a position to pay off their mortgage, which would perhaps not have been possible if they’d remained in the UK.”

deVere Mortgages works with over 200 UK-based and international mortgage lenders, thereby offering clients a wide range of products to suit their individual requirements.  deVere Mortgages also provides buy-to-let opportunities, re-mortgaging, equity release and tax enhancement from rental incomes.

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