More than two million Britons currently own a property abroad and Conti says that the number of clients looking at the refinancing options available in many overseas markets is increasing, particularly in the eurozone. Not only are the rates getting better and better, but the strong euro means that equity in second homes abroad is now worth a great deal more when converted back to sterling.
Clare Nessling, Conti’s operations director, said: “Many people who have unencumbered properties, or who have seen some price growth since their properties abroad were purchased, are releasing equity to pay off debts back in the UK or to help buy UK property. Some are releasing cash to inject into their UK properties to bring down their loan-to-value ratios, especially if they’re hoping to switch to a new mortgage deal.
“Others simply want to switch their overseas mortgage to a significantly cheaper rate and benefit from lower monthly repayments. These new rates offer fantastic value.”
Conti is not suggesting that overseas property owners should increase their level of debt; rather that they should examine the cost of their existing debt and whether that cost can be reduced. If their existing overseas property has increased in value since they purchased it, this could be an opportunity to maximise that gain by removing some of the equity and converting it to sterling.
Conti always recommends that an overseas mortgage and the income used to service the mortgage repayments are in the same currency, so that you’re not at the mercy of fluctuations in exchange rates.
