Buying with euros

rog123 · Post by **rog123** » Wed Mar 19, 2008 10:20 am

Now that the exchange rate is so unfavourable for us Brits wanting to buy in Pgl, I'm wondering if it's better to borrow (take out a mortgage in euros) instead.... any thoughts?

Farol · Post by **Farol** » Wed Mar 19, 2008 1:31 pm

Unless you have an income in Euros then I don't see how this would help. If anything you could be worse off as your repayments in pounds would continue to cost more if the pound continues down against the euro.

If you are buying and expect the downward trend to continue then the sooner you convert pounds to euros the better.

For anybody buying I would suggest going to a proper foreign exchange dealer (Moneycorp, etc) and buying a "future". You can agree now an exchange rate for the future. Not avaialbale for small amounts but very effective for property purchase.

For those of us that already own property then our investment has done well against what it would have done in the UK - just on exchange rate changes. All we have to do is work out how to get the money out of Portugal.

rog123 · Post by **rog123** » Wed Mar 19, 2008 3:48 pm

Sorry I wasn't very clear. I'm thinking of buying a second place, and borrowing in euros against my first flat here in Pgl rather than having to use sterling and change it.

e-richard · Post by **e-richard** » Wed Mar 19, 2008 4:39 pm

Yes, that is a different question Rog123.

If I knew the answer though, I would be richer than Warren Buffett, and happily buy the second property for you. But I'm not. I bought a load of hi tech stocks in 1999 all in USD and so you have to ignore anything I may say

Bruce Wallis · Post by **Bruce Wallis** » Wed Mar 19, 2008 5:03 pm

This exchange rate thing could become an issue.
Many of us rent out in Sterling, but all our costs are in Euros. Ergo our costs are shooting up relative to revenue income and we cant put our UK prices up to compensate.

Those of us who are on UK pensions paid in Portugal are seeing a significant reduction in income.

The only possible silver lining is that the value of our villas are increasing relative to sterling, but the downside is that most buyers in Carcoeiro seem to be British, and the exchange rate is pushing them out of the market. therefore that could depress the market.

I need a drink!

VON VON · Post by **VON VON** » Wed Mar 19, 2008 5:35 pm

sobering thought Bruce