Remortgaging and capital raising are extremely difficult in Europe. For high value property of 3m euros plus some Private Banks and specialist lenders do offer solutions but these will require a wider relationship with the borrower so assets under management are required. The location of the property is also key. Currently these can be considered on a case by case basis in France, Monaco, Switzerland and Spain.
Penthouse Chalet: Courchevel 1650
Family G made an offer of 1.4m euros and although they had funds available they did not want to convert into euros on the current exchange rate and with a property of this value they were also keen to avoid Wealth Tax (ISF payable annually in France on net assets of 1.3m euros and above).
Loan of 1m euros with 50% on fixed and 50% variable pure interest only for 14 years. The client's intention is to keep the fixed rate mortgage over a long term and by locking in at current rates the monthly repayment remains constant and if rates start to rise the client is completely protected. The fixed rate has repayment penalties but not the 50% on variable and this suits the client as he will wish to pay off lump sums early as he receives regular bonuses and if the currency exchange rate improves he would like the flexibility to pay the loan off.
Holiday home in St Tropez
Offer of 2.5m accepted. Mr C looking for a loan amount of 1.625m on a 7 year term interest only. Variable tracker interest only 2.2% which can be repaid at any time with no penalties. This also ensures the client falls below the wealth tax threshold.
Ski apartment in Les Gets
Mr & Mrs S wanted long term security. A fixed repayment mortgage of 80% LTV available on a fixed rate of 2.15% over 20 years.
Holiday Home: Provence
Client aged 70 which means he falls outside French High Street banks' lending criteria due to age. Private banking option was found where the client invested 1.5m euros with the bank and then borrowed 100% of the purchase price of 4m euros. The mortgage was a bullet loan of 5 years on an interest only basis which can be renewed if the client keeps his investment with the bank.
Spain - Barcelona
Quick sale required the client applied for a mortgage and was ready to complete within 3 weeks. LTV of 70% on a repayment mortgage over 22 years paying 2.50% fixed for 2 years.
Portugal - the Algarve
Mr and Mrs S found a property requiring renovation works. 2 mortgages arranged, the first for completion of the sale which was 80% of the value (720,000 euros) and the second to be released as the works progress on the same basis, 80% of the renovation estimates. A preferential rate of 1.96% on a variable tracker repayment mortgage was arranged.