Mortgages from European banks?

[ashrimp]

I understand that you can mortgage a UK property from a European bank account, for example Barclays in France.  This offers a much better interest rate, around 3% but has a maximum term of 20 years.

Does anyone have any knowledge of this?

[AlanS107]

I am not an expert in this by any means. But I understand that one of the problems with these types of mortgages is that you are taking a currency risk. If your salary is in pounds and the mortgage is in euros, then you are making repayments each month in sterling converted to euros. Of course, it can be in your favour, but it is an unknown factor.

Go to www.fool.co.uk and click on | Discussion boards | Managing your finances | Mortgages | where you will be able to look at lots of previous questions and answers, and be able to ask your own questions. It's free to join.

[Loosehead]

Yep Alan is correct, it's considered a big risk to have your mortgage in a currency other than the one in which you are earning. You may save on interest but if the Euro strenghtens that adds to your debt if it weakens that you're ahead but do you want to be at the mercy of currency speculators or worse, incompetant governements.

[Klunk]

I have both a euro mortgage for a property I own in France and a UK one for the house I own here. My UK one is nearly paid up but if I had known about the euro ones and banks before I would have done it years ago. I don't know the process with a French Barclays or HSBC etc as I'm with Credit Agricole but the process is very straight forward although they do like to see everything in triplicate :�)

Payment in euro's is straight forward and not expensive if you avoid the banks. I use a currency exchange company SGM-FX that takes out a sum from our account every qtr and that goes into my account in Credit Agricole which covers all my French bills incuding mortgage. The exchange company does not charge for DD/regular payments if they are over �500. If the amount is under �500 it's �5 a pop. Where they make their money is on the exchange rate. The rates they use are far far better than the banks (and the banks charge lot on top as well) and they always confer with you the rate before processing. So far, touch wood i've not had a problem. It's worth doing a lot of research before you dive in and Alan's recommendation to subcribe to the Fool is definately worth a try.