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My partner and I have lived in the north of the UK for 1.5 years and are thinking of purchasing a property there. We would like to spend around £180k on the property. We have about £30k savings in the UK, but also have about €100k in a standard savings account in our home country (Netherlands).

Since we have only recently moved to the UK, we suspect that our credit rating is probably quite low, so we are are wondering what the best option would be:

  1. get an expensive mortgage since we have no credit history
  2. somehow move the €100k savings from our home country to the UK, but lose money on the transaction.
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    You may want to add in which country(ies) your 100k euros are, and what sort of account. If these are some kind of retirement account that will impact how you should approach this decision.
    – quid
    Commented Sep 8, 2016 at 22:23

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I would move some or all of the money. With £30K savings, you have a 20% deposit, whereas you can get a much better mortgage rate with a 40 or 50% deposit. That's true no matter how good/bad your credit rating, and it's possible that with a bad credit rating you may not even be able to get a mortgage with a small deposit.

Also, you will almost certainly save significantly more by paying less mortgage interest compared to the interest rates on your savings in the Netherlands.

Shop around for a cheap option to transfer money. I had a quick look at Transferwise (no affiliation, they just happen to have a convenient calculator on their website), and the all-in cost for a large one-way transfer seems to be about 0.5%. I think you'll more than make that back in terms of savings on your mortgage.

If you intend to move back to the Netherlands at some point, then you are taking some exchange rate risk by moving your savings to the UK - you don't know if it'll be better or worse when you want to transfer money back. But I guess it won't be that soon if you want to buy a house, so I think the risk is probably worthwhile.

(I calculated the cost of the transfer by converting €100k into GBP, and then converting the resulting amount back again. That left €99k, so a two-way transfer cost 1% and from that I deduced that a one-way transfer costs roughly 0.5%)

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