Have you chosen to finance your property purchase with a euro mortgage? If so, it is imperative that you are aware of the unpredictable foreign exchange risks to your mortgage payments.
When using a French mortgage to purchase property in France, you should be aware of the factors that determine the amount of your mortgage payment.
One important example of this is currency risk.
If your income is not in euros, you face ongoing risk regarding your mortgage repayments. If you look at the movements in the GBP/EUR over the last few years, you will see that controlling risk is important. is an important consideration.
To put this into perspective, over the past five years, the GBP/EUR exchange rate reached an all-time high of 1.2152. This means that for a UK buyer, monthly repayments of €1200 will cost him £987. However, since it has fallen to 1.0607, his monthly payments will increase to £1,131. Over a year, the difference would be £1,730 for him, and on a 25-year mortgage, this difference could equate to £43,250. This is all due to fluctuations in foreign exchange rates.
These adverse developments can have a significant impact on budgets, and in some cases may even leave buyers unable to afford their mortgage repayments, highlighting the risks involved in managing long-term currency exposures. Masu.
The good news is that by using a forex service provider like Moneycorp, there is a way to minimize the risks posed by the forex market and even take advantage of the positive movements that follow.
Moneycorp allows its customers to use forward contracts to lock in the rate of all payments for up to two years. This protects you from future fluctuations during that time and locks in your mortgage costs.
Less risk-averse customers can work with dedicated market specialists to target specific exchange rates that benefit their company. Once these rates are reached, payments will be triggered through market orders.
Moneycorp also offers fixed payment plans by direct debit for those with international mortgage requirements. This reduces the risk of making manual payments every month and gives you peace of mind.
If you have not yet purchased the property or are waiting for it to be completed, get guidance on the best way to deal with the associated payments. If you pay in another currency, the exchange rate will determine the final price of the property, so you should rely on a professional company that will not only give you a competitive rate, but also offer different solutions depending on your situation. Dependency is essential.
Why Moneycorp?
Winner of the Platinum Trusted Service Award 2020 from independent review site Feefo and with 40 years of industry experience, FrenchEntrée has recommended Moneycorp for over 15 years. During this time they have helped thousands of clients plan the best way to pay for their property, as well as subsequent payments, bill payments, mortgages and UK pensions for those retiring to France. We have provided support for remittances to the home country.
Additionally, we have been working with the same people at Moneycorp for over 10 years. You may be familiar with her as she is a frequent contributor to French real estate news magazines. She has 13 years of experience in the foreign exchange field and is a European qualified lawyer with experience in European trading. Mar is happy to answer any questions or inquiries you may have as we navigate this difficult time.
Opening an account is really easy and free. Register online or over the phone in minutes. For FrenchEntrée readers, there are no transfer fees when making payments.
*A deposit may be required for futures contracts.
Please be aware of currency risk. None of the information contained in this article constitutes financial advice and should not be construed as such. TTT Moneycorp Limited (company number 738837) is registered in the United Kingdom. Our registered office is at Floor 5, Zig Zag Building, 70 Victoria Street, London, SW1E 6SQ. Moneycorp is a trading name of TTT Moneycorp Limited, which is authorized and regulated by the Financial Conduct Authority for the provision of payment services (company reference number 308919). Approval date: 06/02/24
