Millions of Britons are looking to buy a property overseas in the next few years, but many are likely to see the application fail because they can't secure a mortgage.
Currently, 7% of Britons are thinking about buying a property abroad in the short term, which translates to more than three million people, according to new research from Castle Trust.
But many are destined to be disappointed. Since 2007, some 6% of the adult population has tried to buy a property abroad but failed, because they were unable to secure a mortgage.
This is despite the fact that the average failed buyer had a deposit worth £46,200.
Now Castle Trust has launched its new Partnership Mortgage which helps people with at least 40% equity in a UK home to release 20% of their property's value to help purchase an overseas property. There is no requirement to make monthly repayments on the loan.
Castle Trust reckons that seven out of 10 failed buyers would have been eligible for its new mortgage.
It believes the overseas mortgage market has massive potential, given the numbers dreaming of owning a property abroad.
Chief executive officer Sean Oldfield said: “Residential property prices in the more desirable parts of southern Europe have fallen dramatically, and this has tempted many to pick up holiday home bargains.
"In practice, however, they often need to secure a local mortgage and this can be very difficult to do.
“Our Partnership Mortgage will enable many homeowners seeking a property abroad to release 20% equity from their UK home, and use this instead of trying to persuade a local bank to help.
"Depending on how much equity is available, they may be able to buy outright, or only require a very small mortgage, which should be more easily obtained.”
Castle Trust charges no rent or interest on their loan, so there are no monthly payments to make. Instead, it shares 40% of any increase in value on the sale of the property from the date when the equity mortgage was taken out.
If the value of the home declines or stands still, borrowers only repay the original loan amount with no interest at all.
Other benefits:
Stable, long-term funding lasting up to 30 years.
No early repayment charges.
Reduced exposure to rising interest rates.
Comments