Is it possible to take out a Euro mortgage on a UK property?

[TW]Fox;20020840 said:
To be fair 1.1 pretty much is parity compared to say 2003 but I must admit I thought it had gone even lower than it is now back in 2009.

News certainly seems to regard the action on CHF as a peg.
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It's not pegged to the Euro, only limited to one side (i.e. the Swiss central bank will do all it can to not allow it to appreciate ANY MORE than a certain rate), which means it can depreciate. That is not pegging.

To OP, there are various things to consider when linking your debt to another currency, such as:

a) rates, now and in the future - and compare them to UK rates
b) any fees to originate and close or move your mortgage (could be too high and prohibitive)
c) what about the conversion of you £ to the Swissie when you make your monthly payments? will that affect you or not? (meaning that you will pay a % as fee for the conversion, used to be the commission but now priced in the conversion rate). Still, it may yet be profitable to take that on the chin
d) more important than all is timing. Obviously currencies go up and down, but what happens if you HAVE to sell at a bad time when the FX rate is not in your favour?

good luck and make sure that you can afford multiples of your monthly payment as it could rise to 2x easily.
 
Some thoughts to consider:

  • It's hard enough to get a mortgage here. How will the same fair in France?
  • I'm uncertain a normal French lender will mortage a UK house. Their valuation system will break.
  • Buying a French house in France is tricky enough.
  • Do you expect a french lender to provide a mortgage when they don't see your income?
  • How will you pay each month (you can't DD, and, you'll get rinsed some months on the exchange rate even if you have a French fixed mortgage)?
 
Ok, so it seems I am right on the economics side, with regards to changes in the exchange rate. What might not work is the potential charges each month from the currency conversion and direct debit, also because it might need a foreign bank account which also might have its own charges. Assuming they come in at less than the change in the debt, then the theory works.

I can't believe you all think the Pound will never rise to the levels it was when the Euro started. It's a very short-termist view to have. The pound is weak compared to the Euro at the moment; it's the worst it's ever been!. As soon as we and they (Euro zone) return to normal the exchange rates will be as they were. It'll probably take no more than 5 years and certainly won't take 10. And even if it does, it's a mortgage! You take them out for 20 years or more!
 
Jonny69 said:
Ok, so it seems I am right on the economics side, with regards to changes in the exchange rate.
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How though? It's as likely to go down as it is go up, which would increase your debt in sterling terms?

As soon as we and they (Euro zone) return to normal the exchange rates will be as they were. It'll probably take no more than 5 years and certainly won't take 10. And even if it does, it's a mortgage! You take them out for 20 years or more!
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This is such a utopian view to take and a very dangerous gamble to make on something as significant as a mortgage.

Where is this renewed strength in the value of Sterling going to come from?
 
[TW]Fox;20021931 said:
Err, it is a currency :confused:
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Not in terms of finance at the highest level, spending it on a day out is different to the bull in Brussels atm, even over the years they are still arguing over whether to save it or not, I really do pity the smaller countries in all this, no rules were set at the start and now the world has to pay for it.

Completely incompetent bunch of whiny little kids fighting over a candy bar as far as i see it.
 
Well, to be fair, the idea of the Euro was simple (in my mind).

If I went to Germany and bought a marsbar, it would cost me 1EUR. If I went to France and bought a marsbar, it would cost me 1EUR. If I went to Slovakia and bought a marsbar, it would cost 1EUR.

Of course, this was never going to be the reality, hence, failure :p
 
Personally I wouldn't touch paper with a barge pole.

Jonny, you're taking a gamble and I see your logic but I can't see the cycle happening again.

Maybe one should be looking at the gold to house price ratio instead ?
 
Energizer Bunny said:
Yes it is. Set at 1.2:1. Announced on Tuesday.

However, other than that, Siandtina is correct. You are taking a big gamble on currency movements and I can't really see why you would want to expose yourself to this kind of risk unless you are extremely confident that rates will move in your favour (and nobody really knows). In fact, if I were the lending bank I would likely insist that you hedged the rate unless you have a very large disposable income compared to the mortgage payments (i.e. you can afford it whatever happens to the rate).

Your big variable for mortgage payments is generally interest rates, why expose yourself to another one? Gambling on currency movements is fine but I would do it with something a little less important than your mortgage.
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No there isn't, a floor or 1.20 was announced on Tuesday and because of safe haven currency purchasing that was seen as a peg but it isn't. Consequently we're currently at 1.2148.
 
Lucero said:
Well, to be fair, the idea of the Euro was simple (in my mind).

If I went to Germany and bought a marsbar, it would cost me 1EUR. If I went to France and bought a marsbar, it would cost me 1EUR. If I went to Slovakia and bought a marsbar, it would cost 1EUR.

Of course, this was never going to be the reality, hence, failure :p
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Right, because a mars bar at Texas costs the same amount in $ as it costs in New York etc etc.

A mars bar has a different price from a train station outlet to your local high street. The retail price of a product is determined by retailers, unless the company sets a recommended price which they are then obliged to follow (many of them anyway).

The euro's purpose was nothing like what you described, nor were its consequences envisaged anywhere near that.
 
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