Cheap mortgages in Europe: don’t rent, buy!
“Now it is cheaper to buy property in Europe than to rent it,” believes George Kachmazov, the founder and CEO of international real estate broker Tranio. “Mortgage costs in European cities are lower than rent payments”, he explains.
Now it is cheaper to buy property than to rent it. Mortgage repayments in European cities are currently hitting below the cost of monthly rent.
The EU has its eyes set on one target: stimulating economic growth; and for consumers that means incredible interest rates, especially in the UK, Germany, Italy, Monaco, Switzerland and other states. They have hit unparalleled lows more than once
|George Kachmazov, the founder and CEO of international real estate broker Tranio|
By April 2015, interest rates in France fell to 1.80%
Mortgage and loan restructuring in Europe are potentially viable options for people looking to buy holiday homes, permanent residences and investment property. With the current rates, they allow you to get more funds and pay less interest on your invested amount. Just recently, a Tranio client got
However, while the current
The possible market risks will crystallise when the European Central Bank starts to increase rates, fuelling proportional mortgage costs for future borrowers. It is likely that many owners will have to sell their property.
The mere fact that money today is of low value in Europe is curious, especially since the earning power of bank deposits is close to zero or even negative. Europeans are looking for options to retain and boost the face value of their capital, engrossing property and heating the market. All this speeds up price growth and injects new investments into real estate.
It all smells a bit fishy. A bubble seems to be growing, that is why we advise our clients intending to invest in overseas real estate not to chase high rental yields. High yields come with high risks, so instead we recommend focusing on the most liquid assets that will always be in demand among tenants and easily resold in any market. Indeed,
George Kachmazov, Tranio Managing Partner