Applying for Overseas Mortgages
Overseas mortgages tend to differ from ‘traditional’ UK mortgages and property finance. It is important to properly understand the fundamental differences between foreign property markets and the UK markets that you may well be accustomed to.
We help secure finance for properties worth €1m or more and also offer refinancing and equity release loans on a case by case basis. Whatever the nature of the financing you need, you will need to consider various factors depending on the country the property is located in:
Local Taxes – Different countries have different tax laws that may or may not affect your property purchase. This includes applications of Capital Gains Tax as well as other taxes. For example, for properties in Spanish territories such as The Balearic Islands, you will need to account for the ‘annual wealth tax’ relating to the net value of any assets (after mortgage deductions), depending on the exact region.
Stress Tests – In recent times and post-Brexit, banks in many European countries (apart from Italy) have introduced ‘stress tests’ for British buyers. This is to ensure that the property loan is completely affordable and to make sure that the buyer can withstand related costs and potential sudden exchange rate fluctuations.
Exchange Rates & Affordability – As with other types of finance, affordability is key to securing international mortgages. How much a borrower can afford is crucial in determining the terms and amount lent as part of an arrangement. Currency fluctuations are one of the most important factors to consider, as small currency fluctuations can potentially add thousands of pounds to the cost of an overseas mortgage.