Euro mortgages
Euro accounts
Most mortgage experts advise against taking out a euro loan unless your salary is paid in that currency or you are a City trader who knows the pitfalls. The danger is that you can be caught out by currency fluctuations. If the euro appreciates, the value of your debt in sterling could rocket.
Abbey National offers a euro mortgage with an interest rate of 1.5 per cent above Euribor, a European interest rate, currently at 3.25 per cent. The maximum you can borrow is 75 per cent of the property's value. For French properties, Barclays is offering rates from 4.8 per cent, and from 4 per cent for Spanish homes. However, in the cut-throat UK mortgage market, with its low rates, you might be better off remortgaging your home here to buy abroad.
Euro accounts
If you have a second home across the Channel or even if you just travel in Europe regularly, a euro account will make life easier. Apart from the convenience, it can be cheaper to use a euro account than paying charges to exchange sterling each time you make a purchase. You can usually use a debit card, too.
An account is especially useful if you buy and rent out a property abroad. You can keep outgoings and rent separate from your UK income.
