Overseas property

Pippaki

Hi All,

We have found a holiday home that we want to buy in Europe. The price is 100,000 Euro plus approx. 15,000 in fees and taxes.

We currently have approx 65k Euro and want to take out a loan for £40k to pay off the holiday home in full so that in future we are not dependant on currency fluctuations.

Our current financial situation is as follows:

Outstanding mortgage: £92k Offset 3.35% fixed until February 2020. An identical flat in our block sold for £225,000 last year
Savings: £40k (offset savings account against mortgage)
NS&I: £7.5k (savings fund for daughter), don't really want to touch this one
Instant access savings account: £15k

We don't have any loans or credit card balances or car to pay off. We currently do overpayments (there is no limit on overpayments) of approx. £350 per month as well as adding £1000 per month to the offset savings account.

We have a meeting with our current mortgage provider and we have already got an agreement in principle but I believe they want to talk to us with regards to critical illness cover and all this stuff.

I was wondering if we should however do the following:
Take £42k and pay off the mortgage and get it to £50k. Then take out a loan for £80k as it is at 2.09%?

Could you please advise if this would be saving us a little bit of money? The mortgage adviser informed us that we would still be able to do unlimited overpayments and we would want to continue with this.

Do you have any other suggestions/thoughts that we may not have thought of?

Thanks for your help
Pippaki