Haus-hunting

By THIS IS MONEY
Updated:

 

I am a UK citizen working and living in Germany, earning e50,000 basic a year. I need a mortgage of e330,000 and I have cash of e30-40,000. Can I get a mortgage in the UK? S, Munich.

Peter Gettins, from mortgage brokers London & Country, says: In theory you should be able to borrow in one country in order to buy in another, but in practice there can be a lot of problems. You don't say where you propose buying but assuming it is in the UK, some lenders will look at this kind of proposal.

Barclays, for instance, would but with a major proviso: that the house in UK is your principal private residence, which means you do not let it, and that you come back to live in it regularly (on weekends for instance), and eventually come back to live in it full-time. In these circumstances, provided you fulfilled other criteria, it would offer a mortgage at the Euribor rate plus 1.5%, which currently makes about 5.5%.

Abbey National, well known as being comfortable with foreign lending, may also look at this kind of scenario, but you would have to talk individual terms. Bear in mind that the Euribor rate changes daily and if you borrow in Euros you will also have a degree of exchange rate risk.

You also face other problems because of your financial position. Getting a e330,000 loan with a deposit of e40,000 means you need a loan of 90% of the property value, and you may struggle to get that high a percentage. Barclays will only lend up to 65% on the kind of deal you are looking for. Also, a loan of e330,000 euros is 6.6 times your basic annual salary. No lender will consider this high a multiple, so you'd have to look at far cheaper properties.

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