Mortgages and Finance for purchasing Property in Brazil
If you live in Europe then we are able to offer you the best rates of finance and mortgage facilities via one of our partners (who have purchased property in Brazil themselves and specialise in raising money for the purchase of property to live in or to rent out.
Western County Consultants who are registered with the Financial Services Authority in the U.K. for giving advice on and arranging mortgages.
Brian H. Hopkinson of Western County Consultants says that when buying in Brazil it makes sense to borrow the money from within the banking facilities in Europe and pay low rates of interest compared to the high rates available in Brazil.
Whereas the norm currently in the U.K. is to pay some 5 to 6% for mortgages within parts of Europe rates can be achieved as low as 3%. Brazil alternatively you will be paying around 15 to 17%.
If you borrow in your own local currency you know how much the debt is. If you borrow in the currency abroad the amount you pay back in your own currency will depend on fluctuations in the currency market.
Borrowing to purchase property to rent out in Brazil makes more sense to me than borrowing money to rent out property in the U.K. and or most parts of Europe This is because property prices are lower in Brazil due to the higher interest rates prevalent there which keep the property prices repressed however rental yields are much higher than in the U.K.
For example Brazil offers a substantially better rental yield than you can get here in the U.K. e.g. a quality three bed house in Salvador Brazil costing GBP 50,000 can be rented out to the local domestic market for GBP 500 a month. Borrowing money here in the U.K. at even 6% would see a cost for this capital of just GBP 250.00 a month so giving a possible 100% profit minus local costs for rental management etc.
As the normal amount you might expect to rent a property out in a good area is around 1% invest GBP 100,000 achieve potential rental income of GBP 1,000 per month and so on.
As rates become lower in Brazil house prices will rise giving a capital growth potential far outweighing that now discernable within most of Europe and the U.K. As prices move up rentals will surely follow so a win win situation follows. Using Bahia Real Estate Ltda to help you open a bank account to keep your rental income on deposit will see you with much higher returns than your finance is costing you in the U.K. So if you are able to finance your purchases from your income in the U.K. let your rental incomes accumulate in Brazil until such time as you want to draw on them.
For those wanting to live in Brazil now or just buy a foothold and then move fully or partially later. Brazil is a good opportunity. Capital tied up in properties in the U.K. become so much more valuable in Brazil.
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