PR mortgage for European property from DBS

[gonzales]

Hi y'all,

I'm interested to hear from anyone who may have taken out a mortgage from a Singapore bank to fund a property in Europe.

Pro's?
Con's?

even possible?

thanks.

[carteki]

Some of the Private Banks offer that option, but it is rare. Probably easier to get a European bank to give you a mortgage (all european banks can mortgage property over the whole of the EU)
Cons - EXCHANGE RATE RISK... You need to understand EXACTLY what you are getting into else you could be in a spot of bother.

[gonzales]

Carteki,
thanks for the info, I had considered the fx risk but it's looking less likely that the local banks will mortgage an eu property. Thanks.

[QRM]

I have seen in the expats mags some firms offering loans for overseas property purchases. They are not mainstream banks.

[gonzales]

I have seen in the expats mags some firms offering loans for overseas property purchases. They are not mainstream banks.

yea saw them too, I shudder at the thought of their rates. Thanks QRM.

[Strong Eagle]

I have a friend who financed Oz property through a Sing bank. He had to put up literally hundreds of thousands because of forex fluctuations.

What with Greece, Ireland, and Spain the Euro could tank, leaving you holding the barrel... your loan equity drops below the minimum when converted to Sing $$.

[gonzales]

I have a friend who financed Oz property through a Sing bank. He had to put up literally hundreds of thousands because of forex fluctuations.

What with Greece, Ireland, and Spain the Euro could tank, leaving you holding the barrel... your loan equity drops below the minimum when converted to Sing $$.

Would it not be in my best interest for the euro to "tank" after taking out the mortgage?

If it "tanked" my Singapore dollars would buy more Euro's, no?

Just a thought.

[Strong Eagle]

I have a friend who financed Oz property through a Sing bank. He had to put up literally hundreds of thousands because of forex fluctuations.

What with Greece, Ireland, and Spain the Euro could tank, leaving you holding the barrel... your loan equity drops below the minimum when converted to Sing $$.

Would it not be in my best interest for the euro to "tank" after taking out the mortgage?

If it "tanked" my Singapore dollars would buy more Euro's, no?

Just a thought.

No. Let's say you buy your property for E100K, S$200K. 20 percent is the down/equity. So, you take an S$ 160K mortgage.

Now, the Euro drops 20 percent. Your EU property now drops in value against the Sing $ so that E100K now only equal to S$ 160K. Oops. Now violating the 20 percent equity ratio... please put up more money.

The loan is always in Sing $$... your property becomes worth less when the currency you bought it in falls.

To take advantage of a tanked Euro you need to earn S$ and pay the loan off in Euro... but you are paying off in S$.

Simply put, look at it this way: If you defaulted at the peg when you took the note, the bank could sell the property for Euros, convert to Sin $ and come out whole. When the Euro drops, the bank could sell your property for Euros and not come out whole because the Euro is worth less.

[gonzales]

Strong eagle,
thanks for explaining that, I see the potential probelm now.

[Girl_Next_Door]

If I am not wrong, HSBC do foreign currency loans, but the interest rates are frightening...

[gonzales]

If I am not wrong, HSBC do foreign currency loans, but the interest rates are frightening...

thanks for that I'll take a look...