buying in porugal?

[rugeleyboy]

me and the wife have been looking for property in portugal, we think we have found one now, so my question is..... would it be cheaper to get a mortgage in portugal if it is possible or is it best to ask over in this country?? obviously i will be speaking to mortgage lenders over here (uk) but i wondered if you have had any experience?

[Loosehead]

It may well be cheaper but you should never have a loan in a currency you are not earning. Currency fluctuations can make the payements very unpredictable. It's also worth pointing out that in portugal and Spain it's almost impossible for foriegners to actually own a property.

[Im a BusyBee]

Loosehead can you tell me why its almost imposible for us to actually own proprty in spain? I have a few friends that say they own property over there - dont they actually own it??

[Loosehead]

What I mean is that for foriegners there is no equivalent of Freehold, that means that the "owner" has some sort of Spanish lease equivalent. Usualy there is not a problem but sometimes weird things can happen. There are a lot of horror stories about things that the authorities will do. For example they can confiscate property if the builder didn't obey the regs properly or you can be forced to pay for facilities to the local area if the place is built in say a "conservation area". Just saying be careful that's all.

[ali_alic]

I bought a place in Florida and, as loosehead says, it is much better to pay a mortgage in your own currency. Also the US quoted 7% interest, whereas the UK ones are quoting 5%. Quite a bit of difference. Just give your local brokers a ring and get them to suss it out for you.

[-Zorro-]

is porugal near Portugal

[rugeleyboy]

it's a small island to the left zorro!!!

FFS!!! it was early when i ask this!!! lol

[-Zorro-]

Ive thought about getting a little place in Portugal myself. Ive heard its a nice place.

[Oneeyedvic]

Since you are buying in Euros - the interest rates should be a lot lower (if you are prepared to take the currency gamble as loosehead mentions).

Not sure what the borrowing rates are in portugal, but I believe that the rate is the same all over the Euro zone - and I know yo ucan borrow money for 2% in Germany at the moment.

At that kind of rate, it may be worth paying for a mortgage in Euros.

[LindyLouLou]

Sorry I cant be specific, but if the rules are similar to buying in spain, then be mindful of the set up fees. We looked into a spanish mortgage and found that the borrowing rate is lower (around 2% at the mo) but you will pay an upfront commission (which is a percentage of the mortgage). This made the mortgage considerably more expensive than it first looked and this is not refundable if you decide to end your mortage early for any reason.
We had really good advice (and predicted figures) from the Royal Bank of Scotland who are based in Gibralter and do spanish mortgages.
Good luck whatever you choose.

[rugeleyboy]

thanks everyone! i am gonna go and see barclays who have (franchised) branches in portugal?

[Oneeyedvic]

I really wouldn't see Barclays but an independent mortgage advisor - barclays will only tell you about there own products - and no one else's - a mortgage advisor will search the whole of the market for the best deal for you.

[rugeleyboy]

i have a friend who is an independant mortgage man but he is very unreliable and you have to chase him all the time! i will see barclays to see what they can offer and a few others to get the best deal!

thanks again!