Until now, releasing equity from a Spanish property, where strong property price increases have occurred in recent years, has been almost impossible beyond 40% of the value of the property.
This innovative product works by allowing clients to swap Sterling debt on their current mortgage in the UK for a Euro mortgage in Spain. This effectively releases equity from the Spanish property and gives back borrowing capacity in the UK.
Allowing clients to take out a Euro mortgage means they can take advantage of the significantly lower EURIBOR (the EU equivalent of our Base Rate). SPF’s new product allows clients to take out a fixed rate of 3.36% for the first year, followed by a variable rate of 12 month EURIBOR plus 1% - which currently would total 3.36%*.
Someone borrowing £150k in the UK on a variable rate currently at 5.75% would be paying £1,365 per month with a 25 year repayment mortgage. If they were to swap this debt to their Spanish property using SPF’s new product they would be repaying only £738 per month – a saving of almost £600 per month.
SPF is continually reviewing and developing their international mortgage capability and is currently able to offer a full service for the following countries: France, Spain, Portugal, Switzerland, Italy, Caribbean, USA, Canada and Dubai.
Mike Boles, Director, Savills Private Finance International, comments:
“For those who have bought property in Spain using cash or money borrowed on their main residence, this is an excellent opportunity to be seriously considered. Remortgaging Spanish property has been virtually impossible until now and this product makes it much easier. This product also allows owners to switch to significantly lower European rates of interest and save almost 50% on their repayments.”
