The latest Quarterly Index compiled by the OverseasGuidesCompany.com has revealed that enquiries from those wanting to buy property overseas have increased by 17 per cent since 2013.
With some of the lowest mortgage rates in history now available to overseas buyers and the strength of the pound against both the euro and the dollar, it is easy to understand this upward turn. We have compared mortgage rates across the most popular expat destinations to establish where the best deals can be found.
All rates below 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 per cent of all enquiries into OGC, Spain remains the most popular destination amongst expats according to the Quarterly Index. There are good repossession properties still available and mortgage rates on offer from as little as 2.75 per cent.
Angelos Koutsoudes, Head of OverseasGuidesCompany.com states: “IMF recently predicted that Spain will lead the rest of the EU in terms of economic growth over the next year. Team that with these 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 per cent, France has accounted for 21 per cent of all enquiries to OGC 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 per cent.
Rates on offer in Portugal sit slightly higher at 4.10 per cent. 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.
Angelos comments: “We have had close to 3000 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 per cent on a variable mortgage.
Angelos explains: “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%. 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 USA has shown great signs of recovery and this looks set to continue with mortgage rates of 3.50 per cent being made available to overseas buyers. In Australia and New Zealand, which consistently attract expat buyers, rates of 4.65 per cent and 5.85 per cent respectively can be secured. Finally, with much of the world’s focus on Dubai and its investment opportunities in the run up to World Expo 2020, rates of just 3.99 per cent will no doubt continue to attract the attention of buyers from overseas.
Angelos concludes: “Although there are some fantastic rates available in long haul destinations, should you really wish to benefit from these record low mortgage rates, your best bet is to focus your search on Europe”.
Charles Purdy, Founder and Director of SmartCurrencyExchange.com, the currency partner of the Overseas Guides Company warns, “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”.