Euro mortgages are less complicated than you expect, explain Barclays....

April 13th 2008

Using a Euro mortgage for your purchase, can not only save money but also be less complicated than you expect……

Buying property in the UK can be stressful enough but buying a home overseas sometimes seems a daunting prospect. On top of finding a property, there is the important task of sorting out the finances. Many clients make the mistake of giving up on the idea of an Italian mortgage, simply because they are not familiar with the language or the system. However arranging a mortgage for an overseas property needn’t be as complex you might think. The biggest step is to work out how much you can borrow and how you are going to borrow it.

First of all you need to decide which currency you want to borrow in. Many customers prefer to take out a Euro mortgage which can have a number of advantages. This allows you to benefit from European interest rates, which historically have been lower than in the UK. For instance, in Italy, Barclays offers a mortgage with a maximum LTV of 80 percent for non-residents with a variable rate of 5.54 percent (EURIBOR 4.347 + 1.20 percent) well below current variable rates in the UK, which are up around 6.5 per cent. The amount therefore that one can save over the lifetime of a mortgage by obtaining a slightly lower rate is enormous.

If the property is being bought as an investment and let locally, having a Euro mortgage has the advantage of keeping your rental income and mortgage repayments in the same currency. This means that the balance between income and outgoings on the property are not subject to fluctuations in exchange rates.

Many customers prefer the concept of a Euro mortgage as it also means that the debt is secured on the property they are buying and not on their home in the UK, which means the equity is protected in the UK property for future financial planning. Euro mortgages are available if the overseas property is to be used as a main residence or a holiday home and the terms of Euro mortgages are broadly similar to UK mortgages with repayment periods of ten to 40 years on variable, fixed or interest only rates.

Obtaining a Euro mortgage is now easier than it has been in the past with a small number of UK and Italian banks advertising to overseas buyers. Although one can get a Euro mortgage from an Italian bank, there are several advantages of getting it from an English bank:

For further information on mortgages offered through Barclays, please visit our mortgage page:

http://www.homesinitaly.co.uk/smx/home/mortgages/