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Vaevictus

Get A Mortgage From A European Bank For A Uk Property?

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Hi guys,

need some advise, don't worry with the usual disclaimers, I am just looking for some different views.

I start a job in Belgium in January. My goal is to work out there for 10 years then potentially come back to the UK

The pay will be quite good and I will be able to easily cover 2500euro per month living expenses(wife+2 kids) with enough left over to cover a mortgage on a 3bed property

It is my opinion that the euro is unusually strong right now and that the British pound will recover.

Because of this, I think that it would be a good hedge to borrow the money required from a European bank, with the loan denominated in euros, on a long term fix, and use this cash for a purchase in the UK.

I would rent the house out in the UK (not expecting it to cover the mortgage, but at least half would be easy) and rent a house in Belgium.

This way, should the pound recover, my monthly outgoings from my Euro wages will be the same, and will open up more possibilities in the future, as should I decide not to return to the uk, the increase in value of the pound would hopefully more than offset any decrease in capital value of the house.

Are there any obvious flaws in this plan? Is it even possible to borrow money from a european bank for a UK property?

Any comments appreciated.

Vae

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...Is it even possible to borrow money from a european bank for a UK property?

This was what I was going to ask you!

The plan sounds fair enough, not sure all would agree on the probable future directions of the respetive currencies but if that's what you think it seems sensible *IF* you can find a bank that'll do it.

I'm not saying it isn't possible, I've never tried, I just can't help but think if it could be done it'd be done far more often.

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....

Are there any obvious flaws in this plan? ..

The rather obvious one to me is the UK property. 10 years is a long time and things can change a lot in that period. Are you buying a place with a view to living in it when you return or as a hedge against UK house price movements? If the former then can you be sure it is where you will want to live in 10 years time?

I have a similar dilemma as we have talked about buying a property in Normandy for our retirement and renting it out until we retire (assuming we ever do as things are going). But places change and can you be sure its going to be the same in 10 years? In the end we have abandoned the idea. We lived in London for 8 years and the area went from nice to crap in that time. That experience sours my view.

Personally if I were in your situation I'd be very tempted to buy in Belgium then sell up when you move back (if you move back) A lot can happen in 10 years. Belgian mortgages tend to be fixed rate and I think in money terms you will probably be better off going that route - particularly if inflation is the end result of the current "problems". That said Belgium is deeply in the sh1t (far more than the UK) with its government finances.

Tough call. The very very best of good fortune to you whatever you choose.

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Are you buying a place with a view to living in it when you return or as a hedge against UK house price movements? If the former then can you be sure it is where you will want to live in 10 years time?

It is more of a hedge against price movements, but would be bought in the area that I grew up in so know the area well and have lots of family there.

Belgian mortgages tend to be fixed rate and I think in money terms you will probably be better off going that route - particularly if inflation is the end result of the current "problems". That said Belgium is deeply in the sh1t (far more than the UK) with its government finances.

Tough call. The very very best of good fortune to you whatever you choose.

I would like to buy there, but I feel that the prices in the area that I would be working are even worse value than those in the uk.

Also, the taxes when buying a property are huge, the size of a deposit in the UK, so renting in the area I will be working in just seems like a no brainer.

Edited by Vaevictus

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  • 146 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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