Find out what you need to know to get a mortgage on the Isle of Man.
Mortgages On The Isle Of Man
Author: Pete Mugleston
CeMAP Mortgage Advisor, MD
Updated: July 8, 2024Buying property on the Isle of Man often involves paying a higher purchase price than you might expect for an equivalent property on the mainland. But with tax reliefs, a slightly different fee structure and more generous lending criteria, mortgages needn’t cost the earth.
In this article we’ll explain how Isle of Man mortgages work, who is eligible and why speaking to a specialist broker is your best route to the deal that best matches your situation.
Yes. There are no immigration borders between the Isle of Man and the mainland UK, and lots of UK banks and mortgage providers offer loans to buy property on the island.
No restrictions exist to prevent UK-based or overseas individuals from purchasing a property on the Isle of Man.
Maximise your chance of approval with a specialist
Aside from the requirements set out above, the lending criteria for Isle of Man mortgages are broadly the same as those for any other type of home loan. For more details on these, read our guide to mortgage applications.
However, mortgages for property on the island must be arranged via a provider based in the Isle of Man. Often, this means you can still borrow from a mainstream lender but will need to deal with a local subsidiary of one of the major UK banks.
Before buying a property, you will need to obtain a mortgage in principle. To do this, you should speak to a broker with deep knowledge of the Isle of Man mortgage market. They will be able to advise you on how to get your mortgage in principle and how to proceed once you have it.
There are also local lenders that may offer more competitive rates depending on your circumstances.
A minimum deposit of 5% is required to get a mortgage on the Isle of Man but some lenders insist on a deposit amount of at least 10%. So, if you can stretch to a 10% deposit, you open up a larger pool of lenders and may be able to access more competitive deals.
As with all forms of secured borrowing, the bigger the deposit you can put down, the less of a risk you are seen as, and the better rate you can secure.
The unique eligibility criteria, necessity to employ an advocate and requirement to find an on-island lender, can make buying property on the Isle of Man seem quite daunting. But with an experienced and knowledgeable broker onside, you can buy with confidence.
We work with brokers who understand the Isle of Man mortgage market inside out. Not only will they be able to help make sure you get the best deal possible, but they’ll also guide you through the entire process from initial enquiry to stepping over the threshold of your new home.
To speak to an expert Isle of Man mortgage broker, get in touch today.
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Whilst the mortgage process in the Isle Of Man tends to mirror that of the UK, it is a self-governing territory in its own right, particularly with regards to its tax laws. For buying a property – with or without a mortgage – this can be a relevant factor, as outlined here:
No. UK stamp duty is not charged on Isle of Man properties as the island has its own government legislature. You will, however, need to pay a registration fee which is effectively the same thing.
Other fees you will need to factor into your cost calculations include:
However, no wealth tax, capital gains tax or death duty are payable on the island.
To buy a property on the island, you must instruct an advocate to purchase the property on your behalf. Subsequently, this allows you to claim tax relief on the mortgage rate paid by the company.
This tax relief also extends to any unsecured borrowing arranged through companies based in the Isle of Man. It is, therefore, seen as a tax-efficient way to borrow.
The tax relief detailed above, along with lower tax rates on the island in general, mean you’re typically able to borrow more in relation to your income than you would be able to on the mainland.
While many mortgage lenders in the UK will lend up to five times your salary, on the Isle of Man, it’s much easier to secure a loan equivalent to six times your household income.
To find out how much you might be able to borrow to purchase property on the island – and what the repayments could be – use our Isle of Man mortgage calculator.
Use this calculator to determine how much you could potentially borrow for a mortgage, based on the typical salary multiples used by most UK lenders.
Most lenders would consider letting you borrow
This is based on 4.5 times your household income, the standard calculation used by the majority of mortgage providers. To borrow more than this, you will need to use a mortgage broker to access specialist lenders.
Some lenders would consider letting you borrow
This is based on 5 times your household income, a salary multiple you might struggle to qualify for without the help of a broker. This income multiple is not widely available to customers who are applying directly with a lender.
A minority of lenders would consider letting you borrow
This is based on 6 times your household income, a salary multiple you will struggle to get without a broker. Six-times salary mortgages are usually only available under very specific circumstances.
Get Started with an expert broker to find out exactly how much you could borrow.
All types of mortgages are available. Loans are available on repayment or interest-only terms, and you can take out a mortgage to buy a home, remortgage to release equity or secure better terms.
Investors also often choose to take out buy to let mortgages on the Isle of Man.
First-time buyers on the island may opt for a guarantor mortgage to offset the deposit costs and secure a better rate. Alternatively, there are two government schemes available for those looking to buy their first home:
You will not be eligible for either scheme if you already own property, either on the island or elsewhere.
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There are several UK banks that lend for the purpose of buying property on the Isle of Man. These include:
Rates vary according to your circumstances, method of borrowing and term. 2-year tracker rates are currently available (4th January 2023) between 4.49% and 5.3% with 5-year fixed terms generally around 5.5%.
The Isle of Man bank will also consider applications, as will other local banks. Which lender and product are right for you will depend on several individual factors.
Yes. If you meet the criteria for an Isle of Man mortgage, you can buy a holiday home on the island.
If you plan to let out your holiday home, you will need to adhere to all guidelines laid down in the island’s Self-Catering Quality Standards booklet. A member of the Visit Isle of Man Team will need to visit to confirm all is well.
You will also need to complete a Building Regulation Application.
Taking out a mortgage on the Isle of Man does not need to be any more stressful or complicated than getting one anywhere else.
When you work with a broker who specialises in this niche, you can rest assured that you’ll get the best deal and there will be no nasty (and expensive) surprises throughout the process.
Our broker matching service will assess your circumstances and pair you up with an Isle of Man mortgage broker who is experienced in securing the best possible deals for people just like you.
To get matched with your ideal broker, call today on 0808 189 2301 or enquire online.
About the author
Pete, a CeMAP-qualified mortgage advisor and an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete successfully went the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained and his love of helping people reach their goals led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!
CeMAP Mortgage Advisor, MD
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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
All of our content is written or verified by qualified advisors from the front line. Our guiding purpose is to ensure borrowers can make the best possible decisions by offering helpful and objective information and guidance on all things mortgages. Please send us a quick email at [email protected] if you spot anything you think needs checking or could be better.
The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK. The overall cost for comparison is 4.8% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration.
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*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us as well as any of our own are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.
Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.
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