British buyers of property overseas through a mortgage from a foreign bank are having a tough time seeking assistance during the COVID-19 pandemic, overseas property professional Simon Conn said.
The exception appears to be banks in Italy, who have shown willing to renegotiate the interest rates on loans. Meanwhile Italian mortgage contracts normally have a clause to allows a 12-month payment holiday.
Banks in France, Spain, Portugal and USA have been unsympathetic however.
Conn said: “The first step borrowers should take is to review the relevant clause in their Italian mortgage contracts, check their eligibility and, if appropriate, make the request to their bank to activate. This applies regardless of the borrower’s nationality.
“British and other non-Italian nationalities can possibly renegotiate their loans – especially if they started a loan years ago at higher rates. Assistance from a specialist Italian lawyer could help negotiations and increase the chances of success.”
In Portugal payment holidays are generally only being offered to primary homeowners, rather than second homeowners, while they similarly aren’t available to second homeowners in Spain.
In the US support doesn’t extend to non-government backed loans. Therefore those with seconds home and investment properties generally aren’t eligible.
In France president Emmanuel Macron has not forced banks to defer mortgage payments.
But Conn added: “Some banks are prepared to consider deferring mortgage commitments on a case by case basis.
“You should check your mortgage offer, as some banks allow clients to defer one payment each year, subject to a maximum number of times over the term of the mortgage.”
This post has originally been featured in Property Wire.