Why take out a French Euro Mortgage

 

By having the liability in the same currency as the value of the asset (Euros), you reduce the risk to your capital account by minimizing the impact of any currency fluctuation.

By taking out a mortgage in Euros you mitigate currency exchange rate risk by minimizing the amount invested in sterling and limiting it solely to your cash contribution.

On the other hand, should you own a UK property and  raise a sterling mortgage secured on your main residence to purchase the French property this means that you are using up liquidity which would have been relatively immediately available should there be a downturn in your future financial circumstances . In the event of which the only option may be the immediate sale of the French property, which may not be possible as often holiday homes are usually located in rural areas and can take a long time to sell. Please be aware that after purchase of the French property your options to raise an equity release mortgage are extremely limited , as the vast majority of French lenders do not offer equity release mortgages in France .

 

Holiday homes often generate rental income which is subject to French tax, French mortgage interest is tax deductible. The same may not be so easily demonstrated to the French Tax Office,  if the mortgage for purchase is raised on a UK property.

 

 IHT - Liability to French IHT a French mortgage is deductible against IHT

 

For details of up to date mortgage rates and mortgage schemes please use this link to take you to our on line mortgage calculator http://www.charleshamer.co.uk/calculator.aspx.