Mortgage for Property in Poland

Torslanda

Hi,

Can anyone advise me where to go to find an overseas mortgage please?  I'm a UK national (currently residing in the UK, as I have all my life) wishing to purchase a flat/apartment in Poland.  The idea is to use it as a holiday home for myself and family, plus rent it out on short term rental (e.g. AirBnB type thing) when I'm not using it in order to generate a bit of income.

I would much prefer to have a mortgage from a UK lender because that's where my money is earned, in pounds sterling.  However, I understand there are no UK lenders currently willing to offer foreign mortgages (please correct me if I'm wrong).  I have done some research online and found various overseas property and mortgage consultants who say that it is possible to mortgage property in Poland but having made enquiries they have come back to me and said that they don't have lender contacts in the Polish market for low value residential properties (one said that his contacts would not deal with anything in Poland lower in value than €2,000,000 with a minimum borrowing of €1,000,000).

I know that it is possible to purchase property in Poland, but I seem to be hitting a brick wall with ways to finance it.  I do have equity with a (mortgaged) residential property in the UK, but I don't want the mortgage on my Polish property to be secured against it - in other words, I'm wanting to play it safe and secure the mortgage against the Polish property so as to not lose the roof over my head in the UK if anything were to go wrong.

Any advice on how to proceed or who to contact would be very much appreciated.

Thank you.

Snookie12cat

I don't believe any lenders lend to over seas property like you have already said. I imagine you would need to approach a polish bank for a mortgage there? 

Torslanda

Snookie12cat said:

I don't believe any lenders lend to over seas property like you have already said. I imagine you would need to approach a polish bank for a mortgage there? 

Yes I think so.  That's the bit that I'm concerned about really because I don't know enough about the market or even which banks to approach.  The language itself wouldn't be too much of a problem (I speak basic Polish and I have enough Polish friends who would be willing to help with translations etc., but I can't expect them to do all the donkey work for me).  I'm really looking for an intermediary who knows the market and specialises in this kind of thing to 'introduce' me to the right lenders and provide advice and ensure I get the best deal etc. etc.

K_S

@torslanda Expat (foreign nationals working in the UK) clients with similar requirements often buy using a mortgage from their home country, based on their overseas earnings. They usually already have a banking relationship in their home country. I don't know of any Polish borrowers but plenty of South Asian clients are able to do that. But of course your case is a bit different as you've never lived in Poland.

As you mentioned, the other alternative people use is to raise funds against their UK property and buy in cash which is likely to be far more straightforward.

steampowered

Torslanda said:

I don't want the mortgage on my Polish property to be secured against it - in other words, I'm wanting to play it safe and secure the mortgage against the Polish property so as to not lose the roof over my head in the UK if anything were to go wrong.

Your plan will not achieve this. 

Even if the new mortgage is only secured against the Polish property, you are still liable to repay the mortgage debt in full.

If you failed to repay the Polish lender they could pursue you for the outstanding debt in the UK, get a CCJ, make you bankrupt if you failed to pay the CCJ, and your UK house could then be sold via the bankruptcy proceedings. 

You will be much better off remortgaging your property in the UK, and using the cash to buy the Polish property.

Torslanda

Thanks @steampowered, quite a sobering thought but it makes complete sense.  Obviously I feel that I can afford the payments (on two mortgages concurrently) otherwise I would not even be entertaining this purchase, but I'm a 'play-it-safe' kind of guy so it appears that if anything were to go wrong, the risk might be too great. 

I'm grateful for the advice.

Looks like it might be worth waiting a while to realise cash from some existing investments and then buy the property outright for cash.  I'm just impatient and wanted to do it now (I'm not getting any younger!).  

Thanks again!

Thrugelmir

Continue to build equity in your current UK property then release when there's sufficient funds for an outright cash purchase. As a non resident you are going to struggle to find a local lender who considers the risk worthwhile on a low value transaction. As you've already found.