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Currency quirk favours expat buyers in Spain

Buyers in Spain can convert their mortgage debt into pounds – which broker said effectively wipes out the currency risk.

In this situation if the pound got stronger your debt in euros would get smaller, with the opposite being true.

Guy Stephenson of, said: “A lot of buyers do not fully understand the importance of currency risk in a long term contract, such as a mortgage.

“Over time, the relationship between currencies can and does move – look at sterling versus the euro since the Brexit vote.

“Buyers of Spanish homes in the UK have seen the effective cost of their euro mortgage repayments rise by around 20% since 2016.”

“For an older buyer or someone whose earnings are not on a steadily upward trend, that borrower may well want to convert their loan back into, for example, sterling, if they are UK resident or paid in sterling and so remove currency risk entirely. This could be a very attractive option for some.”

Safety features such as this or the ability to extend a loan to reduce monthly repayments are often a characteristic of a euro mortgage.