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Cash or euro mortgage?

I soon plan to buy a place in France as a second home. I'm 59 and self-employed paying 40% tax and have savings in ING. I hope to continue earning for c. 6 years. Would I be wiser paying cash or getting a (up to 80%) euro repayment mortgage? I would probably take any mgge over as long a term as possible. Preliminary calcs: 200K (part of existing savings) earning 5% intt - 40% tax = 2% net = 4K pa. (and intt rate likely to drop). ?uro mgge @3.2% = 6.4K pa repayments + compulsory life cover + currency risk (+2K arrangement fee). On the face of it I would be better off paying cash, but I would welcome advice and comments from the gurus on this ng.

Thanks Grunter

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Reply to
Grunter
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In message , Grunter writes

Borrowing to invest in cash (which is what a mortgage would be in his case) doesn't make sense to me, but be sure to leave a decent cash reserve in ING in case of emergencies.

Do you have any income in Euros?

If not then the currency risk could be too high for you. Currency mortgages are only really a good idea if all of the elements of the transaction are denominated in the same currency, i.e. loan, security & repayment. If you do not have any income in Euro's then the 'repayment' element will be in a different currency to the loan and security (i.e the house) and this could have disastrous effects if there is any exchange rate fluctuation, (which there will be).

If you have no Euro income then I would only consider a loan denominated in sterling secured on your UK property.

Reply to
john boyle

| | Borrowing to invest in cash (which is what a mortgage would be in his | case) doesn't make sense to me, but be sure to leave a decent cash | reserve in ING in case of emergencies. | | Do you have any income in Euros? | | If not then the currency risk could be too high for you. Currency | mortgages are only really a good idea if all of the elements of the | transaction are denominated in the same currency, i.e. loan, security & | repayment. If you do not have any income in Euro's then the 'repayment' | element will be in a different currency to the loan and security (i.e | the house) and this could have disastrous effects if there is any | exchange rate fluctuation, (which there will be). | | If you have no Euro income then I would only consider a loan denominated | in sterling secured on your UK property. | -- | John Boyle

Many thanks for that John. That's what I thought. Just wanted to be sure I was thinking the right way.

Cheers Grunter

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Reply to
Grunter

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