Tag Archives: mortgage rates

Managing your mortgage can save money

Enquiries from property buyers and investors wanting to buy overseas property has increased 17 percent this year, according to the latest quarterly index compiled by the OverseasGuidesCompany.com.

With some of the lowest mortgage rates in history now available to overseas buyers, and the strength of the British pound, for example, against both the Euro and the U.S. Dollar, it is easy to understand this upward turn.

The organisation has compared mortgage rates across the most popular expatriate destinations to establish where the best deals can be found.

Note that all rates are given as an average. Actual rates will be determined subject to the financial status of the client, the size of the mortgage required, location and type of property and loan to value.

Accounting for 24 percent of all enquiries into the company, Spain remains the most popular destination amongst expats according to the index. There are good repossession properties still available, and mortgage rates on offer from as little as 2.75 percent.

Angelos Koutsoudes, Head of OverseasGuidesCompany.com said: “The IMF recently predicted that Spain will lead the rest of the European Union in terms of economic growth over the next year. Combine that with the low rates and the Spanish government’s on-going commitment to attracting overseas buyers. and you will begin to understand why Spain remains such a popular choice”.

Trailing its neighbour by just a few percent, France has accounted for 21 percent of all enquiries to the company so far in 2014. The evergreen popularity of the nation has been further fuelled by the European Central Bank’s (ECB) interest rate drop introduced throughout Europe, which has made it possible to secure a mortgage in France for as little as 1.80 percent.

Rates on offer in Portugal sit slightly higher at 4.10 percent. This is a reflection of the nation’s desire to safeguard its economy now things have started to move in a positive direction once again.

Koutsoudes said: “We have had close to 3,000 enquiries about buying property in Portugal so far in 2014. The Algarve remains a popular choice for expats, especially those looking for a lifestyle change or a buy-to-let investment”.

Another country benefitting from the ECB low base rate is Italy, where it is possible to secure a rate of 2.9 percent on a variable mortgage.

Koutsoudes explained: “There has been a reduction in all of the taxes involved in purchasing Italian property. Other reasons for its growing popularity include its lack of inheritance tax and no Capital Gains Tax after five years”.

Buyers can find a mortgage in Turkey for a rate of around 6.40 percent. Despite recent political conflict, 2014 has been a year of significant growth in Turkey, suggesting that financially savvy overseas property buyers haven’t been put off snapping up the readily available bargain properties.

The market in the U.S.has shown great signs of recovery and this looks set to continue with mortgage rates of 3.50 percent being made available to overseas buyers.

In Australia and New Zealand, which consistently attract expat buyers, rates of 4.65 percent and 5.85 percent respectively can be secured.

With much of the world’s focus on Dubai and its investment opportunities in the run up to World Expo 2020, rates of 3.99 percent will no doubt continue to attract the attention of buyers from overseas.

Charles Purdy, Founder and Director of SmartCurrencyExchange.com, the currency partner of the Overseas Guides Company sounded a note of caution.

He warned: “It is important that overseas buyers understand the importance of effectively managing their monthly currency transfers for regular payments such as mortgages.

“If you’ve benefitted from these great mortgage rates, the last thing you want to do is end up losing the money that you would have saved yourself as a result of adverse exchange rates or in fees charged by your bank.

“Look for ways to manage this risk, through using a reliable regular payments programme and forward purchasing currency when rates are favourable”.


Singapore property prices vulnerable

After three years of super-low interest rates and 60% price growth Barclays believes Singapore property prices could be vulnerable to a sharp rate increase.

“Our current base case is flat private home prices to FY16E, but we estimate these could fall up to 23% should mortgage rates increase by 200 bps within a short period, all things remaining constant,” it says.

The outcome could be worse if a mortgage rate increase coincides with bumper supply. However, it notes “Drastic price collapses could be mitigated if there were a more gradual increase in interest rates, accompanied by income growth, some expansion of the mortgage-servicing ratio and given more prudent owners and investors who have been taking a longer-term view after seven rounds of measures since September 2009.”

The house continues to like Overweight-rated CapitaLand (C31.SG) for its more diversified profile and recovering ROE.

Source – TheEdge – 28 Jun 2013