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Expat Investor : March April 2009
INVESTING in association with EXPATRIATE MORTGAGES Lender Bank of Scotland International Barclays Bank Halifax Irish Permanent International NatWest International NatWest Mtg Service Royal Bank of Scotland Royal Bank of Scotland Int Woolwich 7.35 7.14 4.5 6.5 5.19 5.19 4.44 4.44 5.49 Rate % Max. % Fee 80 80 75 75 80 95 95 80 80 0.5-1% Varies Varies - 0.5-1% £0-£1499 £0-£1499 0.5-1% Varies Notes Lifetime tracker and fixed rates available Fixed, tracker and SVR Barclays Bank Fixed and tracker rates No products currently available Fixed and tracker rates. Min £50k Standard mortgage range available Standard mortgage range available Fixed and tracker rates available Standard mortgage range available Figures compiled: 3/2/09. Source: MoneyFacts www.moneyfacts.co.uk Expatriate = UK residents working abroad short-term and buying a property in the UK. Lender may allow property to be let. OVERSEAS PROPERTIES Lender Banco Halifax Hispania Barclays Bank HSBC Investec Private Bank Leeds BS Lloyds TSB Newcastle Building Society Norwich & Peterborough BS Royal Bank of Scotland International International Private Finance Source: MoneyFacts Landlords need 20% deposit or no deal Location Spain Spain Portugal, Italy & France France, Spain, Malta France, Italy, Spain, Portugal, Monaco & Guernsey Gibraltar, Spain, France France, Spain, Portugal, Australia, NZ, Canada, US, Dubai, Hong Kong, Singapore & UK Gibraltar Gibraltar & Southern Spain Spain France, Spain, Portugal, Italy, Florida, South Africa, Bulgaria Investec Private Bank Irish Permanent International Leeds Building Society NatWest International EURO MORTGAGES Lender Bank of Scotland International Notes Rate linked to EURO LIBOR + 1.20% with option to set rate for 3, 6, 12 months. Max 70% LTV. Interest only or capital repayment. Min £400k. Max term 20 years. Arrangement fee up to 1%. Redemption charge applies. Rates also available on same terms in US dollar, Swiss Franc, Japanese Yen and HK dollar. Rate linked to Barclays Bank 3 month LIBOR rate applicable for a 90 day interest period. For house purchase only. On an interest only basis, max 65% LTV, advance £500k, term 5 to 20 yrs and fee 0.5%. Redemption charge applies. Barclays Euro Current Account required. Rates also available on same terms in US dollar, Japanese Yen, Swiss Franc and Hong Kong dollar. Rate is based on EURIBOR +1.25% to 2%. Max 70% LTV. Upfront fee of up to 1%. Min adv of £1m in euro equivalent. No redemption fee penalty. Also available on same basis in US$, Swiss Franc, Japanese Yen. Managed multi-currency also available. Rate is based on EURIBOR + 1.24%. Max 75% purchase & remortgage. No redemption fee payable. Fee 1% (min €1.5k) Irish € product. Rate based on EURIBOR + 1.45%. Max 75% LTV. No fee. No redepemp tion penalty payable. Rate is based on 3 month LIBOR + margin. Max 60% purchase & remortgage, on repay ment or endowment basis, max term 30 years. Income multiples 3.75 x joint plus 1 x 2nd or 2.75 joint. Minimum advance £100k in euro equivalent. No redemption penalty payable. Fee – refer. Mortgages for borrowers who are paid in euros to purchase or remortgage their main UK property Source: MoneyFacts Currency Euro Euro Euro, Maltese lira or selected major currency Sterling, euro, Sterling, euro Currency of choice Sterling Sterling Euro, sterling Euro, sterling, US dollar Royal Bank of Scotland International UK property Currency switching allowed on all major currencies Source: MoneyFacts SVRs as they have to their residential version. “Despite a 4% drop in bank base rate since last year, landlords have seen little impact with the average fixed rate dropping just 0.03%. Tracker mortgages have come down but the average margin above base has increased to an astonishing 3.18%. The buy-to-let sector has been one of the biggest casualties of the last year and a half, with 93% of all deals disappearing in that time reports MoneyFacts. Landlords unable to find less than a 20% deposit won’t find a new deal after the Post Office became the last lender to withdraw its 85% loan to value (LTV) deals. Deals of between 10% and 15% which used to make up 61.1% of the market, are no longer available.The number of deals for a 20% deposit has also plummeted. Landlords really need at least a 30% deposit to get the best deals and even then they are paying a hefty price. Analyst Michelle Slade, tells Expat Investor,“Falling house prices have caused the equity in many landlords’ portfolios to reduce, but with no deals available for less than a 20% deposit, many have no option but to move onto the lender’s standard variable rate (SVR) at the end of their existing deal . “For some this may be no great hardship, but some lenders have not passed on cuts to their buy-to-let “Buy-to-let lenders have also tightened criteria, restricting the size of portfolios that landlords can have, both in number of properties and maximum total advance. “The Mortgage Works has become the first lender to introduce a collar to its pay rate calculation, meaning borrowers will have to earn bigger rental incomes; not an easy feat in these difficult times.” Landlords have had a rough ride in the last year and it looks like 2009 won’t be any easier. A similar scenario is being felt in the residential property market. The proportion of new mortgage deals requiring at least a 25% deposit has risen, from 54% to 60%. What’s more, 25% of all deals on offer in fact require a 40% deposit, according to Moneyfacts. Further concern amongst mortgage seekers was felt as the Bank of England revealed that banks and building societies are expected to rein in their lending even more over the coming months. "The number of deals available for those with a deposit of 25% or more continues to increase as the lenders are looking to cherry pick the best customers,” explains Ms Slade. "Worries over falling house prices and the potential of customers getting into negative equity has caused the number of deals for customers with just a 10% deposit or less to fall to an all-time low.” MoneyFacts reports that there are now just 21 mortgages available with a deposit of five per cent or less, compared with the position at the beginning of last February when there were more than 1,200 on offer. The ongoing squeeze on available credit to property buyers has precipitated a similar collapse in the number of home loans where lenders ask for a 10% deposit, once the traditional down payment. These have fallen from nearly 1,200 at the start of February 2008 to the present 148. FOREIGN CURRENCY LOANS Lender Bank of Scotland International Barclays Bank Investec Private Bank Irish Permanent International NatWest International Location UK property UK property UK & selected European property UK property UK property 22 EXPAT INVESTOR ? March/April 2009 expatinvestor.com
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