Sterling V euro mortgage

Hi,

I'm buying a property in the North of Ireland and am unsure whether a sterling or Eur mortgage is better value right now. I am being offered a sterling mortgage for £283,000 at a rate of 6% (Bank of England base rate is 5.25 right now with a margin of .75). I can also get a Eur mortgage for the sterling equivalent €394,000.00 at a rate of ECB 4% plus a margin of 3.75%. I know the margin on the Eur mortgage looks a lot worse but when i work out the cost per thousand it seems cheaper. The Eur cost per 1,000 is €6.04 while the GBP is £5 but if I convert the £5 to Eur it works out at €6.60.
Can anyone give me some advice....?
Thanks!

Is this an owner occupier or a property investment query?

Re: STg V Eur Mortgage

The rate is not the most important issue here. In either currency you should be able to get a loan from 0.7 to 1.0 % above base rate.

The issue here is currency fluctuation and such issues as the currency your income is based in and where you intend to live are important. e.g. if your income is in sterling and your purchase cost is in sterling but you get a Euro mortgage then an appreciation of the Euro on the loaned amount against a sterling asset is a problem . Also if you are funding a Euro loan with a sterling income or vice versa if you know what I mean.

We would need this kind of info to advise you further.

Also is it a home or investment.

Agree with high flier. It sounds like you're living in the south and hence your dilemma. Sterling is at an all time low so the prospect of taking a euro mortgage would seem attractive.

Currency could still give you a kick so it might be safer to spread your currency exposure by taking a sterling mortgage.

If its an investment or you plan on living there yourself there'll be sterling coming in to pay towards anyway backing up the above.

You can fix the exchange rate going forward for a year if you do want to lock in current lows for the moment.