Isles of Scilly Mortgages
The Isles of Scilly are a collection of small islands found off the southwestern part of Cornwall that is part of the United Kingdom and is, in fact, the most easterly part of England.
The Scillies are popular with English holiday-goers for their scenic coast and seascapes, as well as an ambient microclimate home to a wide variety of flora and fauna. The Scillies are popular with bird watchers since many migrant bird species use the islands as a mid-way point on their journey.
The Scilly Isles are a popular place to buy a property – whether you want to live there year-round or keep it as a tranquil holiday home – but just how easy is it to get a mortgage there?
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Isles of Scilly mortgages
The territory is part of the United Kingdom, ceremonially forming a part of the county of Cornwall. Therefore, you can get a mortgage to buy a property on one of the islands just like you can for any other part of the country.
That being said, most mortgage providers do not cover properties on the Isles of Scilly, which makes things more of a struggle for the potential buyer. The good news is that an experienced mortgage broker like Loan Corp can help you to find one of the few lenders who can help you get the mortgage you need.
Many of the mortgage providers are specialist lenders as opposed to mainstream banks. All this means is that tracking down a mortgage on the Scilly Isles will take a bit of time, but your chances will be better if you seek help from a mortgage broker to help you find the lender you need.
Who can get a property mortgage on the Isles of Scilly?
Here’s the good news: anyone can apply for a property mortgage on the Isles of Scilly.
Any mortgage lender willing to help you purchase a property on the Scilly Isles will use the same eligibility criteria as a lender dealing with the UK mainland. This means that Scilly Isle residents and non-residents are welcome to apply.
Isles of Scilly obstacles
Anyone can apply for a mortgage on the Isles of Scilly, but the archipelago is Duchy-owned and forms a part of the Duchy of Cornwall. This means that roughly a quarter of properties are Duchy-owned and not available for purchase.
Additionally, one entire island belongs to the Dorrien Smiths, a family who do not sell property but lease it through shared ownership, meaning there’s even less available to purchase.
Despite a tiny population and limited space, very few properties on the Isles of Scilly are available to buy, meaning any that go on the market are more than a little bit pricey.
Types of mortgage
Getting a mortgage for a property in the Scilly Isles is a little bit more of a challenge than getting one for the UK mainland, only because fewer mortgage providers are willing or able to support property purchases on the Scillies.
If you find one, you might have less choice about the provider and, therefore, interest rates than you would if you were looking to buy on the UK mainland. A mortgage broker like Loan Corp is better positioned to search for the right mortgage for all clients – even those moving to the Scillies!
Repayment mortgages
This is the most common type of mortgage. With a repayment mortgage, you pay a set amount each month, but each of these repayments is used partly to cover the monthly interest and chip away at the borrowed capital.
The good thing about a repayment mortgage is that you will own your property outright at the end of the agreed mortgage term, which is usually about 25 years.
Interest-only mortgages
Although they are a little more difficult to come by, interest-only mortgages are often preferred by first-time buyers or clients with other debts, as they demand lower monthly repayments. The problem with an interest-only mortgage is that you are only covering the interest each month, so at the end of the term, you will still have to repay the amount you borrowed.
A mortgage lender is unlikely to agree to an interest-only mortgage unless you have an airtight repayment plan.
Mortgages for professionals
The amount you can borrow will depend, to an extent, on your credit score and monthly salary but let’s face it: some professions are woefully underpaid. Contact Loan Corp today and submit a mortgage application, and you will be automatically matched with an experienced broker who will be able to find the right deal for your profession.
Let’s take teachers, for example. Each of the Isles of Scilly has its own primary school, except for Bryher. The island of St. Mary’s also has a secondary school. Even though there are few properties and prices are high, the Scilly Isles still need teaching staff to run these schools.
Loan Corp can help broker mortgages for teachers. Mortgages are more difficult to come by on the Isles of Scilly; however, like on the mainland, teachers are often preferred mortgage candidates as teaching is considered a steady job with a fixed income.
Buy-to-let mortgages
Many people choose to holiday on the Isles of Scilly without desiring to live there year-round. For this reason, prospective buyers may well decide to purchase a property to rent out or let as a holiday home.
A buy-to-let mortgage tends to demand a higher deposit, but you can earn this back by renting the property out – helping you save money in the long run. In theory, applying for a buy-to-let mortgage is no more complicated for the Scilly Isles than for the mainland.
Since fewer mortgage lenders will provide the money for an Isles of Scilly property on a buy-to-let or holiday-let mortgage, clients have a better chance of obtaining the mortgage they need if they go through a mortgage broker like Loan Corp.
Mortgage deposit
The client must lay down a mortgage deposit for 98% of the mortgages brokered by Loan Corp. The minimum required is typically 5% but paying more than this will demonstrate financial security and is likely to earn a better mortgage rate.
Since most mortgages on the Isles of Scilly are provided by specialist lenders, who offer more flexible mortgage solutions, the deposit requirements may be lower or higher than a traditional mainland mortgage.
Interest rates
Interest rates are the amount you pay each month for the privilege of borrowing capital. Mortgages for these islands tend to come from specialist lenders, so interest rates are at their discretion.
Interest rates can be fixed, which means they are declared when you agree to the deal and cannot change for the mortgage duration. Alternatively, with a variable rate mortgage, the interest rates can rise and fall in accordance with the Bank of England base rate.
How much can you borrow?
The property’s cost, location, your credit score and current salary determine the amount you can borrow. In this way, applying for a mortgage on the islands is no different than applying for a mortgage on the UK mainland.
FAQs
Can anyone apply for a mortgage on the Isles of Scilly?
Any UK citizen can apply, but eligibility isn’t the problem. Unfortunately, comparatively few lenders are willing to fork out the capital for a Scilly Isles purchase, meaning you could have quite a search before finding one.
Why do lenders not support Scilly Isles mortgages?
There are a few reasons: jobs are fewer and further between, and mortgage clients relocating to the Isles of Scilly are often seen as a higher risk.
Many of the properties available are non-standard construction, meaning the buildings’ quality and security are considered sub-standard by mainstream mortgage lenders.
Conclusion
The Isles of Scilly is undoubtedly an unusual place to live. Still, the quieter pace of life and relative seclusion greatly appeal to many buyers looking to escape the bustle of mainland life. Applying for a mortgage on the Isles of Scilly is more difficult due to the fewer mortgage providers willing to support purchases in this archipelago.
Add to this the relative lack of available property on the market and subsequent rise in property prices, and finding a mortgage that will grant enough capital with affordable rates will be a challenge.
That hardly means your future on the Isles of Scilly is off the table, though. Contact Loan Corp to search for the ideal mortgage solution based on your financial circumstance. Whether you are a first-time buyer or have experience with property, we will match you with a broker who understands the requirements of a Scilly Isles mortgage and can help you through the process so you can start your new island life stress-free.
If you are unsure or want any free advice to get your application started, contact us now.