Buy an apartment in Germany from the UK with credit

Hello everyone,

I have a somewhat more specific question for you but hope that there are some experts here who might be able to help me.

My name is Peter and I currently live in London and would like to buy an apartment in Germany to rent out. My income is in pounds and I am taxed in England, but I also have assets in euros.

I have spoken with a few banks regarding a loan for this, but I was told that since the end of March there is the new [Wohnimmobilienkreditrichtlinie] which states that if income and residence are in an EU country with a currency other than the euro, one has the irrevocable right to convert the loan into pounds under certain conditions.

Because of this, I have unfortunately not been able to find a bank willing to cooperate with me as they do not want to take the risk that I might convert the loan at some point (which I do not intend to do, but unfortunately cannot legally waive this right). If I understand correctly, there is even a workaround; this would be if one proves that the majority of the assets are already in euros (which is also the case for me), but unfortunately the bank must take the first step to push such a solution in general.

I thought I would start the discussion here in the forum in the hope that I am not the only one with this problem. I would be happy to hear your experiences if perhaps someone has already found a solution with their bank or a loan broker.

Looking forward to any hints.

Thank you very much and best regards

Peter

Hello Peter,

there is no workaround, as it is not about assets in euros, but about income in euros.

And as you present it, the majority of your income is in GBP.

The correct solution would therefore not be a foreign currency loan in EUR, but rather a loan in GBP, which is not subject to exchange rate fluctuations relative to your income.

And unfortunately, only a few banks offer that again.

If you hold assets in euros, it might be advisable to additionally pledge them as collateral, especially if they are investments.

However, the question of how this has been done correctly since March still needs to be clarified. Most banks still have too little experience with this. It has to settle in first.

Hello,

unfortunately, I cannot really help you with your question. One idea might be: try to finance the purchase through a British bank (e.g. HSBC; RBS [brit. Haupthaus]; Barclays; Lloyds) or an internationally operating bank (e.g. ABN Amro). However, I cannot tell you what conditions such a bank imposes on the loan.