Mortgage for Foreign Property - a general question

Graeme7777

Hi,

If one wishes to buy a property abroad, is it generally advisable to raise the mortage from a UK lender (given that one lives and earns here), or rather to approach a bank in the country where the house is located?

Thanks!

slopemaster

Well, I'm not an expert, and it surely depends where abroad.
But in my experience (in France), lenders here won't lend on a house abroad, and lenders there won't lend on an income from abroad. So you're pretty much stuffed - unless you've got a house here you can remortgage.
I managed to borrow off family in the end.
PS Beware exchanger rate risks, too

Met_Bobby

It depends upon what you are comfortable with. If it is a uk bank and payments are in stirling then it is only the changes in interest rates that will concern you. If you use uk income to pay an overseas lender then you will also have the currency exchange rate to consider.

Eg a Mortgage payment of 500 euros or dollars would cost almost 50% more in stirling than it would have a couple of years ago. A big increase.

My personal preference would be to borrow using the same currency as my income.

dwsjarcmcd

slopemaster wrote: »

Well, I'm not an expert, and it surely depends where abroad.
But in my experience (in France), lenders here won't lend on a house abroad, and lenders there won't lend on an income from abroad. So you're pretty much stuffed - unless you've got a house here you can remortgage.
I managed to borrow off family in the end.
PS Beware exchanger rate risks, too

Not quite true. I work and live in the UK but have a French mortgage on our French property. I do tend to agree with the above post regarding having the loan in the currency you get paid in. That said, there are a couple of other points to note

- You can fix your exchange rate for up to about 2 years, admittedly not that clever right now!
- In France at least, you can offset mortgage interest against the tax you would pay on rental income.

Before you decide, I think you need to do some more research.

simpywimpy

Barclays do a euro mortgage that you can get from the UK for purchases abroad.

Any French bank will consider you for a mortgage based on your UK income as they would anyone else. A number in areas where there are a lot of English residents will have English speakers in their branch. If going through an estate agent to buy, they often give mortgage introductions too.

Any of the currency brokers will advise on fixing the exchange rate for a fixed term to cover your mortgage payments but as said, not advisable at the minute when the rate is so low. Suggestions would be Hifx, Rational FX, FTTGlobal. All will advise over the phone.

I dont know where you are buying but if you search the internet or pick up a magazine for your chosen area there are usually mortgage brokers advertising that will deal with the whole thing for you.

herbiesjp

I think the amswer would be to go to whihcver lender offers you the best deal, be that in the UK or the country of purchase.

But as the posters above have rightly said, it will depend on the country you are buying in, not not only the interest rate you are paying, but the overall costs i.e. exchange rates if borrowing in a different currency, deposits needed etc.

There are UK lenders that will lend to purchase abroad, or UK companies that have contacts with foreign lenders (in the country of purchase), which means the process is done for you over here and may be easier

Anna_Murray

My question or predicament is:

I have a Euro Mortgage in Ireland (Eire) which I pay by sending a monthly Sterling cheque to the Bank of Ireland, as the pound has weakened so much I am now paying nearly double the amount in Sterling to cover the monthly Euro mortgage payments. Does anyway have any advice they can offer on how I can reduce my monthly payments or get round this situation?