1. Home
  2. UK Finance Discussions
  3. Spanish mortgage from UK

Spanish mortgage from UK

Looking for advice on the best way to go about getting a mortgage on a Spanish property please.

I have an off-plan Townhouse that cost 150k and will be completed mid-2005, upon which I need to have the 60% mortgage ready. I have paid the rest (40%) already with cash.

I know Halifax do some Spanish mortgages, and also the developer has a deal with the bank, but I wonder if either of those are the best way to proceed.

Basically I want fixed rate, interest only, lowest possible payments, and most importantly guaranteed based on projected RENT ONLY, rather than requiring me to have a high income. As by then I will already have 2 or 3 mortgages in the UK, some for buy-to-let properties, I need something that does not take that into account.

Specifically, if I got to a mortgage company based in Spain, am I right to think they don't/can't do credit checks with UK financial organisations, so couldn't even know whether I have a UK mortgage or not?

Also are there any laws I need to be aware of with regard to UK citizens purchasing properties on Spanish land (Murcia) then letting it out to tourists?

Thanks!

Reply to
Mark Hamptons
Loading thread data ...

if you have a Euro mortgage you will have to live with exchange rate fluctuations. If your main home is going to be over here and you are pain in sterling you are better off having a sterling mortgage

Reply to
Pet Lover

Thanks. My main home will be in the UK and I will be paying for the Spanish property's mortgage in uros. What would you recommend in that case?

Reply to
Mark Hamptons

Well, at todays rate for your 90,000 you are going to need a 130,000 Euro mortgage. If the exchange rate falls to say 1.30 euros to the pound you mortgage will effectively go up to 100,000. So lets say your mortgage repayments were 600 Euros a month that equates to 410 but if the exchange rate goes down that will cost you 461. I personnaly would look at a company in this country and get your mortgage in pounds. Yes of course the exchange rate could go up as well, it depends if you want the risk?

Reply to
Pet Lover

If hes renting and his rent is in Euros?

Reply to
Tumbleweed

Yes, renting in Euros.

Reply to
Mark Hamptons

You would be better getting a euro mortgage. Your income is in Euros, and this removes exchange rate risk. A sterling mortgage would only expose you to exchange rate fluctuations.

John

Reply to
John Bishop

That would be sensible if the majority of his rental income covers the mortgage payments, if not he's better in GBP

Reply to
Pet Lover

Talk to some spanish agents who help Brits buy ?

Reply to
Daytona

In message , Mark Hamptons writes

If the Euros are from the rental income which you receive in Euros, then get a Euro Mortgage as well, so that all three elements of the loan, i.e.loan, security, repayment, are all denominated in the same currency.

Reply to
john boyle

In message , Pet Lover writes

No. If the repayment is coming from rent in Euros, then get the loan in euros too.

Having the loan, repayment and security all valued in the same currency removes exchange risk.

Reply to
john boyle

In message , Pet Lover writes

Hmm, depends on the figures. I think it would be better to have at least the loan and security denominated in the same currency because that ensures a safe 'get out'. If the exchange rate moves against you by

100%, you would likely be able to tolerate a few months bad repayments but at least the sale would redeem the mortgage. But if the loan was in sterling you may end up in negative equity.
Reply to
john boyle

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.