Comparing options: New mortgage or equity release back home?

Should you use a Spanish mortgage, or a mortgage on your property at home? There are various good reasons for using a Spanish mortgage as opposed to a mortgage taken out on a property in your home country.

It makes sense to have the asset (the property) and the liability (the mortgage) in the same currency. This helps to minimise one source of uncertainty and risk (the Euro-Sterling exchange rate).

If you plan to rent out your property, and use the income to help finance the mortgage, then it makes sense to have your monthly mortgage repayments in the same currency as your rental income.

What about interest rates? If base rates are lower in Spain than back home that is a reason to take out a mortgage in Spain. But mortgages tend to last a long time and who knows where rates will be in 10 years time, so it’s best not to give too much importance to this question.

The best rule of thumb is to use a Spanish mortgage to finance a Spanish property purchase, so the loan and its collateral are both in the same currency and country.