SPF says it has launched the first product that allows UK owners of Spanish property to release equity of up to 80% of the property value. Until now, releasing equity from a Spanish property, where strong property price increases have occurred in recent years, has been almost impossible beyond 40% of its value.
The product works by allowing clients to swap sterling debt on their current mortgage in the UK for a euro mortgage in Spain. This effectively releases equity from the Spanish property and gives back borrowing capacity in the UK.
Allowing clients to take out a euro mortgage means they can take advantage of the significantly lower Euribor, the European Union equivalent of the UK base rate.
SPF's product allows clients to take out a fixed rate of 3.36% for the first year, followed by a variable rate of 12 month Euribor plus 1% – which currently would total 3.36%.
SPF is continually reviewing and developing its international mortgage capability and is able to offer a full service for France, Spain, Portugal, Switzerland, Italy, Caribbean, USA, Canada and Dubai.
Mike Boles, director at Savills Private Finance International, says: “For those who have bought property in Spain using cash or money borrowed on their main residence, this is an excellent opportunity to be seriously considered.
“Remortgaging Spanish property has been virtually impossible until now and this product makes it much easier. This product also allows owners to switch to significantly lower European rates of interest and save almost 50% on their repayments.”