Mortgages for British in Spain
YOU may be aware that Boris Johnson has finally, in his words, ‘got Brexit done’, ending Britain’s 47 years as part of the EU.
For the hundreds of thousands of Brits living in Spain, this has various ramifications, both personal and financial.
UK nationals now have until December 31 to sort out crucial aspects of their lives abroad, such as obtaining Spanish residencia and changing their driving licenses.
However one thing that this ‘transitional period’ doesn’t really address, is the Brits who are trying to get a mortgage in Spain.
From first-time buyers, to those snapping up a second home, Brexit has added to the mortgage complications of British expats in Spain.
Spanish banks are running scared in the same way they were last summer, due to fears over exchange rates and employment prospects. AS ALWAYS, THE EXCHANGE RATE BETWEEN EURO AND POUND STERLING HAS AN IMPACT AS MORTGAGE LOANS BECOME MORE EXPENSIVE TO SERVICE FOR THOSE EARNING IN POUNDS THEREBY CHANGING THE AFFORDABILITY CALCULATIONS.
We are finding that prospective British buyers are seeing their dream moves AFFECTED, as banks pull out of 70% LTV deals. THE GOOD NEWS IS THAT THERE IS STILL SOME LIMITED AVAILABILITY BUT THESE DEALS ARE HARDER TO ACCESS.
This is compounded by a new law in Spain, obliging banks to charge the mortgage in the buyer’s home currency if the exchange rate has fallen significantly against the Euro. AS ALWAYS, EVERY BANK IS INTERPRETING THE NEW RULES, INTRODUCED LAST JUNE, IN DIFFERENT WAYS, AND THE KEY IS TO KNOW WHERE ARE THE RED LINES WITH EACH LENDER.
Brexit has been chaotic for the value of the Pound, which hit record lows last August.
While there was renewed hope last week as the Pound climbed to €1.2009 against the Euro after Johnson’s Cabinet reshuffle, there remains scepticism from banks in Spain.
FOR NOW WE ARE STILL ACCESSING COMPETITIVE MORTGAGE PRODUCT FOR OUR BRITISH CLIENTS BUT, THE MORTAGE MARKET IS FLUID, SO, IF YOU ARE CONSIDERING A PURCHASE USING A MORTGAGE, IT MAY BE SENSIBLE TO DO THIS SOONER RATHER THAN LATER.