Mortgages Section

Banco Hispania Now Introduces Euro Mortgages

February 2005

Back in November 2005 the Leeds Building Society was one of the first UK institutions to introduce a Euro mortgage with the amount borrowed in Euros and the monthly payment in Euros. Now, the Banco Halifax Hispania have also introduced their own version of a Euro based mortgage.

What Is A Euro Based Mortgage

• Basically it is just the same as a mortgage you'd buy in the UK apart from the principal and interest payments are denominated in Euros
• They are to be used for buying property in Spain
• The Banco Halifax is offering 5 different styles which have fixed rate interest periods of between 1 and 20 years
• They are available for the purchase, construction and refurbishment of properties as well as refinancing from another mortgage lender, for example you may have a Sterling based mortgage with ABC bank and decide to get one in Euros instead
• 70% of the property's value can be borrowed and interest rate only (for 10 years) are also offered
• Banco Halifax will also offer advice to guide you through the whole process
• The interest rate will obviously change but as of writing expect to pay around 3.78% on a E200,000 fixed for 20 years, that means a monthly payment of around E1,190

Summary

These mortgages are primarily designed for people with some or all their income in Euros and this is a very important point to note especially when a mortgage usually lasts for multi-years.

If you don't have any income in Euros then major financial problems can develop in the future if the Euro currency were to get considerably stronger against Sterling. It would be quite possible in this situation for monthly payments to double over a year or so. Of course, the opposite is also true in that the Euro may weaken considerably but looking at the potential downside is always where your focus should be when long term financial planning.

See Also

• Banco Halifax's website - mortgage section
• Find's Mortgage Lender links