Fred James

If they are 60+ then that will limit what they can borrow.

Banks don't usually allow mortgages past 70 so a short term mortgage of €500 might only get them €50k or even less.

snikpoh

I currently have a large mortgage in excess of 250k which is costing about 560euros/month! but interest only.

I disagree that interest only is to be avoided. My interest rate is currently about 3% - yep, it might go up but then my investments are currently returning in excess of 7% even in the current crisis! So, I don't think having an interest only mortgage is wrong. Spend 3% to get 7% - no brainer.

I know one has to be careful and to watch both investment rates and mortgage rates but at the moment all is fine. If it does ever go wrong, then I am lucky enough to be able to pay the mortgage off.

cricketman

Sure it depends on circumstance, but it is misleading to tell someone that you can get a 200k mortgage for 500 euros a month when it is interest only.

Interest only mortgages are also difficult or impossible to get now for most people. The rules of the game have changed completely in the past 5 years.

7% return a year is not usual in Spain. For example, my landlord gets 2.7% of the sales price back in rent each month (not including expenses and void periods). In London we get 7% of what we paid in 2003, and about 5% of what someone would need to pay now.

Domino

having bought since 1972 the uk house hasnt sold, the oh is already living in a rental so that for the time being is our intention - renting.

advantages are you are not liable for any maintenance, perhaps the odd light bulb. all other costs the same as for buying. Also if you decide you want to go somewhere else - pack up and move, you can't do that if you buy, unless you rent out.

understand the uk has a vastly increasing need for rented properties, but many of these are for economic renters - those who have had to move for work and have rented out their house because they couldnt sell it at a useful price

everyone here has +ve and -ve for the place they live, its a nice place and a holiday may show them where they can feel happy - the only criteria that holds any water

good luck to them and you
rgds

bil

No that really hits the spot. Good post.

cricketman

And dont forget the 10% sales and mortgage taxes in Spain when you buy a house, and which you must pay in cash.

So on a 250k property, this is 25k in taxes, which would cover your rent at 500 euros per month for over 4 years

HBG

For anyone coming to Spain at or near retirement age, perhaps having the proceeds from the sale of a house in the UK, in a UK bank, it might be wise to leave it there and rent in Spain.

Financial statistics are always boring unless kept very short.

I've just deleted a long paragraph full of numbers to say that you could live, and live well, for ever.

Domino

but at least you have worked it out to you satisfaction, which is important.
there are many options, variations on options, and then many who want their "own package" will add more variations

perhaps there is room somewhere for an erudite writer to list many of those options and variations for others to read
problem is there will always be someone around who wants to argue about prices, as this forum proves

jackytoo

Anyone who take out a mortgage in their 60's must be crazy. Especially a spanish one with all the extra costs involved.

Ray51

Even an interest-only one ( which might work out to less than the usual rent ) ?

steviedeluxe

I disagree (not with the renting part, although even there there are starting to be some good bargains crop up, and it's better to buy low, sell high)

If you had followed this advice a few years back, your nest egg of £320,000 (worth say 464,000 Euros at an exchange rate of 1.45 ) would now only be worth 364,800 Euros at an exchange rate of 1.14 !!!! A loss of nearly 100,000 Euros.

All the financial advisors I've read, state that you should keep a majority of your currency balance in the country where you have your living expenses.

Now of course, if you think that the pound will appreciate soon against the Euro, then it makes sense to keep some still in the UK. Equally it makes sense to have a reserve fund in case things don't work out and you need to flee back to the UK. I personally think that at some point the pound will recover, but this could be a lot longer than we expect.

The fly in the ointment is that none of us really know which direction the currencies are heading in! But if you need money for paying rent, diesel, eating out whatever, it makes sense to keep a good chunk of your currency in the place you are spending it. Yes, you can hedge by keeping some at home. But apart from that, none of us really know where the currencies are headed - the predictions on currency movements here on this board never get it right, to my knowledge.

Take professional financial advice - don't rely on me (or HBG) on these matters.

Rambling Rose

Sometimes you just have to do your own research and then go with it. Spain is such a big country. Its a hugh generalisation to say that all property is still overpriced and will fall further. Try these sites if you want a good idea on property prices.

www.elmundo.es/suvivienda/sv/tasaciones

http://prices.kyero.com/2011/07/04/k...ndex-released/

As for returning to the UK - with the current exchange rate we could afford to sell our house for less than we bought it for and still break even or possibly profit. Thats because we bought just under 5 years ago at an exchange rate of 1.45. Looking at property back where we came from, prices have dropped there too.

We'd pay more for food, petrol, heating less for internet, water (we have a standing charge of 600 euros here before we turn on a tap). As we are retired and have no mortage we would be about the same financially.

There are good things and bad things about both places.

steviedeluxe

It was very interesting looking at the Kyero price comparisons between regions - thank you!

For instance the average house price would be 628,300 Euros in Barcelona, 299,000 Euros in Malaga.
Yet the average price can be far lower elsewhere. 81,000 in Jaen (inland Andalucia iirc), 84,700 in Lugo (Galicia) and 110,300 in Teruel (Aragon).

Huge differences between vibrant city spots, and quieter country places. Very interesting. Will this gap persist to such an extent in future?

Domino

think you will find the Jaen price is lower because there are a large no of 2 up 2 down terraced properties that are barely keeping each other standing and being marketed at 20-40k in need of full refurb.
even the Spanish don't want them, so really no comparison with (say) Malaga with its larger high cost already refurbished properties.

I used to work with a lady whose daughter lived in Barcelona, 2 bed flat valued at 220,000 having child on the way wanted another bedroom but couldnt afford the extra 70k+ wanted to buy. That was 4yrs ago.

steviedeluxe

Well I've never been to Jaen, and never previously come across a Brit who has! Met a couple of students from there (in Granada) and they were very friendly, but then so are plenty of other Spanish people.
Barcelona prices do seem extremely high considering people based there complain about their salaries. But I suppose they get so many tourists, accommodation cost is high as it can be rented out.