Euro Exchange Rate

There is a lot of concern at the moment o­n the state of the Euro.

The main thing to consider is not what the actual rate is, BUT... What will the effects be o­n you?? Buying whilst the Euro is Low can actually give you an advantage!

Some people are a little confused over the effects of this o­n there purchase. So here is an example which will help.

If buying off plan.

An initial €3000 will be required this removes the property from the market. The remaining amount, normally between 30 and 40% will be made in stage payments.

Example:-

Purchase of property for €200,000.

Required to pay €3000 to reserve the property, this removes the property from the market.  Then within 30 days the remainder of a 30% deposit plus IVA is required. €61,200.

The rate of exchange at 29/11/07 was 1.3720

Therefore to buy this payment o­n this date would have been                    £44,606.41.

To buy the same amount today (24/11/09) at the rate of 1.1147 would be £54,902.66.

Therefore the difference is                                                                    £10,296.25. 

However property prices have fallen by as much as 40% in some areas, so the savings are still being made.

When the property is completed, you could take the option of a Spanish mortgage for the remainder of the funds, this will mean that the Euro exchange rate does not impact o­n you at all any further. If a Spanish mortgage is not something you intended o­n in the long term, when the Euro rate rises again, you can repay the mortgage without any penalties at all.  By utilising the option of the mortgage you have also reduced the price of the property.  

Key Ready or Resale Properties.

A deposit to take the property off the market will be required.  Normally 10% of the purcahse price.  As a mortgage may be obtained for between 60 and 80%.

The mortgage is a way of beating the exchange rates. Take a mortgage o­n an interest only basis, and invest your lump sum if you would like, we can help you do this. Wait until the Euro increases, and when it does the mortgage can be repaid penalty free if this is you preference.

For further clarification relating to the matter, please feel free to call or email.