Owning a home abroad is a dream for many, but there can sometimes be complexities when selling the property and bringing the funds back into the UK. In the case of a recent client, they faced restrictions from Greece, which imposed capital controls in 2015 limiting transfers abroad by companies and individuals.
The limits were subsequently lifted on 1st September 2019; however our client was looking to transact in the summer of 2019 when they were still firmly in place.
Having found their £1million dream home in the UK, our clients discovered they needed to borrow more than a high street lender was willing to offer. Their case was unusual because their second home in Greece, once sold, would provide them with £100,000 towards the balance of the mortgage. However, at that time they did not have any guarantee about when the government in Greece planned to lift the restrictions on transferring money from the property.
Our Associate Director Daniel Gracie was able to negotiate a flexible solution with a building society. A loan for £100,000 was provided on a two year basis with no early repayment charge and £350,000 was secured on a long-term mortgage. Both agreements were interest only in order to make them affordable.
The agreement included additional flexibility: once our clients had cleared the £100,000 mortgage using the funds from the sale of their Greek property, the remaining £350,000 loan would convert to a repayment mortgage. Daniel was also able to negotiate an option within the mortgage which would allow our clients to rent out a second annex in their new home, for which they paid a 0.5% surcharge.
The case is another example of our team’s ability to create bespoke solutions tailored to our client’s individual situations, however complex they may seem.
|Loan amount 1:|
Loan amount 2:
|3.89% fixed for 2 years
5.74% variable for 2 years
|Loan To Value:||41%|
|APRC:||Overall cost for comparison 5.49% APRC representative variable|
|Type:||Interest Only & repayment|
|Lenders arrangement fee:||0.35% of the loan amount|
|Early repayment charge:||3% of outstanding loan in the first 2 years|
Overall cost for comparison 5.49% APRC representative variable based on 24 monthly payments at a fixed rate of 3.89% followed by 228 monthly payments at the lenders variable rate, currently 5.49% and 24 payments at the lenders variable rate, currently 5.74%.
Total amount to be repaid £866,889.64. As the mortgage rate is not fixed for the duration of the loan this amount is illustrative and may vary in particular as a result of variations in interest rate.
Because part of your loan is a variable interest rate loan, the actual APRC could be different from this APRC if the interest rate for your loan changes. The actual rate available will depend upon individual circumstances and may not be available to everyone. Ask for a personalised illustration.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.