Swiss Franc Mortgages

 Having been in banking for 33 years I wrote this article.

Some information from my last foray into the market for Swiss Franc Mortgages

Bank of Cyprus (BOC) are currently offering housing loans in Swiss Francs at 1.25% over the London Interbank Offer Rate (LIBOR), which I think is about 4.25% at the moment, so the total would be around 5.5%. The max term is 40 years or the borrowers 70th birthday, whichever comes first.

Alpha insisted on giving me the rate for euro at 5.5% and sterling at 6.5% .
1.  If the developer banks with the same company as you appoach for the loan You can get the bank guarantee waived for a one off payment of 2% of the loan as the bank have a track record with the developer.

2.  If the borrower uses a different bank for the mortgage you have to pay them and incredible 1.8% of the loan value every year till the title deeds are issued. They see it an insurance that they charge to ensure that there risk is covered if the developer decided not to co operate in the prompt delivery of the title deeds.

So Option 1 of the 2% is better.

If the you are buying from small developer make it a condition of the purchase that the developer mortgages the land  with the bank it does not cost him anything other than around £50 for the contract set up and the 2% which you have to pay for him. Mortgage arrangement fees are 1% of the loan and the power of attorney £8 to set up.

Insurance on the mortgage is mandatory though it normallly takes about a year to organise because of the medical which you will need and ECG if your GP does not have one.  Rates for comparison are around a further 15%  of your mortgage which covers life and contents useful if you are renting  your place out and if you do this with Alpha you get free public liability insurance which is essential.

An independent financial consultant might charge £250 for setting one of these deals up. There are loads of forms and much chasing to do so it may be worthwhile.

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