Pre-Settled Status Mortgage: Getting a UK Home Loan

Pre-settled status, granted under the EU Settlement Scheme to EU, EEA, and Swiss nationals with less than five years of continuous UK residence, is one of the better-recognised immigration statuses in the UK mortgage market. Most lenders understand the route clearly: the holder has the right to live and work in the UK, cannot have their status removed without notice, and can apply for full settled status once they reach five years of continuous residence.

The result is a wide and competitive lender pool. Pre-settled status applicants are not restricted to a handful of specialist lenders. With a reasonable deposit and at least a year of UK employment, most applicants will find a range of mainstream and specialist lenders willing to proceed.

Who this page is for

You hold EU Settlement Scheme pre-settled status. You live and work in the UK. You want to buy a property or remortgage, and you want to know how your immigration status is treated by lenders, what deposit you need, and what the application involves.

If you have already reached settled status or ILR, see UK mortgages for foreign nationals instead. If you live outside the UK and want to buy UK property from abroad, see non-UK resident mortgages.

Can I get a UK mortgage with pre-settled status?

Yes. Pre-settled status is a recognised immigration status with a clear right to remain, and UK lenders treat it accordingly. The lender pool is narrower than for settled status or Indefinite Leave to Remain, but it is wide by any reasonable measure.

The application is assessed on the standard affordability and credit checks that apply to any mortgage. Pre-settled status introduces two additional factors.

Time remaining on pre-settled status. Lenders check how long your pre-settled status has to run. Most want at least two years remaining. Some are flexible on this, particularly given the government's 2023 automatic extension rules (see below). Applicants who are already approaching their five-year settled status application often find lenders more relaxed about the remaining term.

Deposit size. Standard five per cent deposits are rarely available on pre-settled status. Most lenders want ten to fifteen per cent as a working minimum. A higher deposit broadens the pool and can improve rate access.

Beyond these two factors, the assessment is the same as for a standard UK residential application.

Pre-settled status versus settled status: what the difference means

Settled status (and ILR) is the highest category. Lenders treat it as equivalent to British citizenship for mortgage purposes. The full lender pool is available, standard deposits apply, and there is no immigration-related premium on rates.

Pre-settled status sits below settled status in lender appetite, but the gap is narrower than most applicants expect. In practice:

• The lender pool is wide. Most mainstream and specialist lenders accept pre-settled applicants. A small number do not.
• Deposits tend to be slightly higher than for settled or ILR applicants. Ten to fifteen per cent rather than five per cent.
• Rate premiums are generally small. Most pre-settled applicants access rates that are broadly comparable to settled status applicants at the same loan-to-value and income.
• Lenders check the time remaining on pre-settled status, which is not a check that applies to settled applicants.

The practical outcome is that most pre-settled applicants with ten per cent deposit and stable UK employment are mortgage-ready.

Deposit requirements

Deposit is the variable that most affects which lenders are available and at what rate.

Ten per cent. Workable for applicants with strong profiles: at least one to two years of continuous UK employment, a clean credit file, and stable income. The lender pool is reasonable at this level.

Fifteen per cent. A comfortable working level for most pre-settled applicants. The pool broadens and rate options improve.

Twenty-five per cent and above. Opens specialist and private bank options in addition to the mainstream pool.

The importance of deposit size for pre-settled applicants is slightly higher than for settled or ILR holders. A pre-settled applicant with fifteen per cent deposit will generally access a better range of lenders and rates than one with ten per cent, and the uplift is meaningful enough to be worth waiting for if circumstances allow.

For deposit source documentation, the standard AML requirements apply. If any part of the deposit is held in a non-UK account or denominated in a foreign currency, bank statements showing accumulation over time and a clear source are required.

The May 2023 rules change and what it means for lenders

Until 2023, there was a concern among some lenders that pre-settled status could simply expire if the holder did not apply for settled status in time. This created an underwriting question: what happens to the mortgage if the borrower loses their right to remain?

In May 2023 the UK government changed the rules. Pre-settled status can no longer expire automatically. If a holder does not apply for settled status before their pre-settled status end date, the status is automatically extended until they do apply. They will receive notification before any change.

This change has broadly reduced lender concern about the expiry risk. A number of lenders that had previously been cautious about pre-settled applications have become more open. The more pressing assessment factor now is straightforwardly the time remaining, as a proxy for how close the applicant is to achieving settled status.

What lenders check

The checks for a pre-settled status mortgage are:

• Status confirmation. Via the UK Visas and Immigration share code system. This is the digital equivalent of a BRP card for pre-settled and settled status holders.
• Time remaining. The date the pre-settled status was granted and when it runs to. Most lenders want at least two years remaining.
• UK residence and employment period. Most lenders want at least one year of continuous UK employment, ideally with the same employer.
• UK credit history. Lenders rely on UK credit reference agency data. EU nationals who arrived recently may have a thinner UK credit file. This is workable but the pool narrows for applicants with less than one year of UK credit history.
• Standard affordability. Income, outgoings, existing debts, and the loan-to-value of the property.
• Deposit source. As for any applicant. Funds from EU bank accounts need statements showing accumulation and source. An AML-clean deposit from a UK account is the simplest presentation.

Joint applications: buying with a settled or ILR partner

A joint application where one party has settled status, ILR, or British citizenship opens the full lender pool. Several lenders that require settled status as a sole applicant will lend on standard terms in a joint application where the co-applicant is settled or British.

This is one of the most effective routes for pre-settled applicants. Where one partner is pre-settled and the other is settled or a UK citizen, the mortgage options available are close to identical to those available to a settled sole applicant.

The affordability calculation uses both incomes, and both applicants are on the title deeds and the mortgage. The application and documentation requirements are slightly higher but the lender pool and rate access typically justify it.

EU income or recent arrival: the foreign income consideration

Most pre-settled applicants have been living and working in the UK for at least a year and are paid in sterling. For these applicants, income is assessed as standard UK income.

Where part of your income is paid in euros or another currency, or paid by an employer based in an EU member state, the foreign income rules apply. Most lenders apply a reduction to foreign-currency income before assessment. A small number of specialist lenders do not. For applicants with continuing EU-sourced income, lender choice on this point can have a material effect on the borrowing amount.

What the process looks like

We take the relevant details: time on pre-settled status, UK employment history, income, deposit available and its source, target property and price, credit history outline. We map that against current lender criteria and come back with the three to five lenders worth approaching in order of fit.

A first conversation is enough to establish whether the application is straightforward, what borrowing is realistic, and what documentation the lender will want, particularly around status confirmation and deposit source.

A typical pre-settled status residential mortgage completes in eight to twelve weeks from first conversation to completion. The timeline is broadly the same as for a standard UK application.

Frequently asked questions