Why take a mortgage in your European country of purchase?
Our EURIBOR information page considers the various advantages of a mortgage secured in Euros using the EURIBOR base rate. However, lower interest rates are not the only advantage of securing a mortgage in the country of purchase. Using a mortgage offered by a European lender to purchase a property in Europe provides a number of advantages over using cash savings or using funds raised through mortgages in the UK.
Please consult the
Mortgage Types page of your country of purchase for more information on how the mortgage products work in that particular country in order to compare this with the mortgage products and procedures that you are used to.
We like to remain objective at Assetz Finance and we have therefore compiled a table of both the advantages and the disadvantages of each method of financing a European property purchase. We have not included the disadvantage of language barrier or mortgage industry differences, as Assetz Finance will ensure that you do not suffer from these disadvantages when securing a mortgage.
This table should help you to choose the best method of finance for your circumstances. We do however strongly advise that you speak to one of our specialist mortgage advisers to make sure you make the right decision.
Guide |
| European Mortgage |
UK Re-Mortgage |
Savings |
Reduce tax liabilities (by offsetting mortgage interest against taxable profit) |
Pay tax in your country of purchase (income tax, wealth tax if applicable…) |
Pay tax in your country of purchase (income tax, wealth tax if applicable…) |
Transfer modest amount to pay initial deposit - with associated costs and currency exchange risks |
Transfer a large amount of funds to the country of purchase to cover the full purchase price - with increased associated costs and increased currency exchange risks |
Transfer a large amount of funds to your country of purchase to cover the full purchase price - with increased associated costs and increased currency exchange risks |
No transfer necessary from country of purchase to the UK of rental income received as it will be used to pay the mortgage |
Continual transfer of rental income back to the UK required and associated costs/currency exchange risks |
Continual transfer of rental income back to the UK required and associated costs/currency exchange risks |
Interest rates based on a traditionally lower base rate - the average Euribor over the last 9 years is 3.4% |
Interest rates based on the Bank of England base rate - on average a whole % dearer than the Euribor |
N/A |
Loan secured on property in country of purchase only - keeping your home address and UK assets free of risk |
Loan secured on UK property - exposing your home address to repossession |
N/A |
Full proof of income must be provided with the application |
‘Non status’ and ‘self-cert’ mortgages available |
N/A |
Need to pay a fee to register the mortgage in country of purchase - it is obligatory for all mortgages taken to be registered at the land registry of the country in which the mortgage is taken. There is a fee for doing this. There may also be a fee for removing the loan from the land registry when it is repaid. It typically costs 1-1.5% to register the mortgage and about half that to remove it depending on the size of the mortgage |
Mortgage registration fee to pay in your country of purchase |
N/A |
Mortgage arrangement fees charged by European lenders typically range from €0 to 1% of the mortgage amount |
Mortgage arrangement fee charged by UK lenders typically range from £0 to 3% of the mortgage amount |
N/A |
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To speak with a member of the Assetz Finance team please call 0845 400 8000
