Unless you are lucky enough to have the money sitting in the bank to buy your new purchase outright, you will need to borrow it. For most buyers, that comes down to a straightforward choice: should you get a local mortgage in the country where you are buying, or should you borrow in sterling from the UK, perhaps by releasing equity in your UK home and increasing your mortgage there?
In some countries, the decision is made for you. Until recently Thailand and Turkey simply did not permit foreigners to obtain a local mortgage. Even today, the number of financial institutions in both countries that will lend to you is very limited. In other countries, such as Bulgaria, interest rates have historically been high, so the decision to go elsewhere has been an easy one.
Once you have established how much you plan to spend – and remember to include taxes and buying costs in your calculations – deduct the size of the deposit you can stump up and you will know how much you need to borrow. Mortgage lenders in many countries demand a larger deposit than is usual in the UK, with some banks lending only 65% to 70% of the sale price. Lending terms are also often shorter than at home. In Dubai, it is not impossible to find someone willing to lend over 25 years, but 15 years is far more usual
In some countries, the decision is made for you. Until recently Thailand and Turkey simply did not permit foreigners to obtain a local mortgage. Even today, the number of financial institutions in both countries that will lend to you is very limited. In other countries, such as Bulgaria, interest rates have historically been high, so the decision to go elsewhere has been an easy one.
Once you have established how much you plan to spend – and remember to include taxes and buying costs in your calculations – deduct the size of the deposit you can stump up and you will know how much you need to borrow. Mortgage lenders in many countries demand a larger deposit than is usual in the UK, with some banks lending only 65% to 70% of the sale price. Lending terms are also often shorter than at home. In Dubai, it is not impossible to find someone willing to lend over 25 years, but 15 years is far more usual
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