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My situation: We live in the UK, and have some money saved up for deposit to buy a house here. Getting a mortgage for this case would not be a problem.

We're trying to get money for self-build property in an EU country (Slovenia). Plan is to some day move there. Asking UK banks, none would do a mortgage for property abroad if they don't operate there. As far as I know, no banks operate in both countries.

Asking banks in Slovenia for mortgages, most have a requirement of being a resident there. One didn't get stopped by this, but the issue was receiving our income in GBP while credit would be in EUR.

Biggest unsecured loan in the UK appears to be 50k, which is not even close to being enough.

One option seems to be buying a property in the UK (which was already something we kind of planned) and after building some equity getting a second mortgage or remortgaging. This would take at least a few years if I understand correctly.

We're in a financially stable position, good credit rating, etc.

What other ways or strategies could we take to get that big loan?

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  • Asking UK banks, none would do a mortgage for property abroad if they don't operate there Even if they do it isn't going to be easy either. The only option I can envisage would be for you to take a personal loan which willn't be cheap. Do you have the concept of guarantor in Slovenia ? The guarantor guarantees to pay the loan if you cannot pay. What you can try is buy a property in UK and use that as a guarantee to take a bigger loan.
    – DumbCoder
    Feb 13, 2020 at 8:24
  • Guarantors do exist, but we don't feel comfortable putting anyone in a position like that. I'm not sure it would even resolve an issue, as we're told "no" before we can start discussing what type of security would the loan have.
    – domen
    Feb 13, 2020 at 13:56
  • "and after building some equity getting a second mortgage or remortgaging" I would expect that to have similar hurdles.
    – TripeHound
    Jul 12, 2020 at 10:17
  • @TripeHound I think I wasn't clear above. Effectively I'd get a secured loan in same currency (GBP) as the previously bought property. I'd then exchange it to different currency (EUR) and use elsewhere, but lender won't really care about that. I have looked a bit more into this, and it appears I cannot get above the original LTV (loan-to-value), so I could only borrow up to the amount I've already paid off the mortgage (which is expected).
    – domen
    Aug 7, 2020 at 15:50

1 Answer 1

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The bank wants the total mortgage payment amount in EUR to be hedged against the GBP because income is in the GBP ? That's the correct answer. Buy the EUR/GBP currency pair. For instance, at 10X leverage 25000 EUR holds a 250000 EUR position. That's a 25000 EUR margin deposit plus cushion for volatility.

There is an interest cost of buying the EUR/GBP of 0.75% interest plus about 0.75% in forex commission. Possibly, 3750 EUR rollover-interest per year on 250000 EUR.

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    I'm a bit lost with these words, sorry. Bank in which country would be able to do that? I assume this would be a loan secured with the new property? What's the name of the product I'm looking for?
    – domen
    Feb 13, 2020 at 6:40
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    I was referring to the foreign bank that didn't require residency but was worried about a customer borrowing in EUR but paying from income in GBP. A currency hedge should be all they need to make the mortgage loan. A currency hedge will have some expense in addition to the cost of the mortgage. And the currency hedge would be in addition to their standard mortgage requirements.
    – S Spring
    Feb 13, 2020 at 8:00

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