Question: I am buying a property in Spain and have a property in the UK with no mortgage on it. Should I take out a Spanish mortgage to buy the property in Spain or should I mortgage the property here to buy it?
Answer: This is a difficult question and I am afraid that the answer is a typical lawyers one – it depends!
There are advantages and disadvantages to both. Euro mortgages have lower interest rates than the UK (especially at the moment!) but can cost up to 4% of the loan to set up. UK mortgages cost more in interest but cost less (maybe nothing) to set up. Therefore it depends on how long you take the mortgage out for as to which one will work out cheapest (assuming that the interest rates stay the same).
It is also important to look at where you are resident and whether you can offset your interest payments against income tax.
What currency is the income that you will pay back the mortgage in – this can have an effect.
Increasing people also mortgage partly in both. I would suggest taking some independent advice on your circumstances
The International Law Partnership LLP Solicitors & International Lawyers The Vaults 193-197 High Holborn London WC1V 7BD
© The International Law Partnership
|