Profit from a French Mortgage
Thursday 18 August 2011
You may be able to profit from the low exchange rate by taking out a French mortgage.
Some international buyers of French property are looking to take flexible mortgage products that they can redeem at any stage without penalty.
These savvy investors are hoping to take advantage of the low euro by converting loans back to sterling within two years.
Let us take an example.
Say a buyer purchases in cash for €350,000. At today’s exchange rate of 1.14, the sterling cost of the purchase is £307,000. If they take out an 80% interest only mortgage and redeem it after a short period at an exchange rate of €1.30 then the sterling cost will be £285,385 - a saving of £21,633.
Coupled with low borrowing rates, this is a tempting prospect for many buyers.
Clearly, there is the risk that the euro could rally, although many currency brokers are predicting that sterling will appreciate following the difficulties in the Eurozone.
If you would like to talk more about this approach then please submit your details here or call one of our French mortgage consultants on +44 (0) 207 484 4645.
International Private Finance Ltd
This article was featured in our Newsletter dated 18/08/2011