A growing number of overseas property buyers are financing purchases with local currency mortgages, writes Sharlene Goff in London.

Lenders' criteria have been relaxed in relation to the established markets such as France, Spain and Italy, although obtaining finance in areas such as Bulgaria and Turkey is still quite tough.

Buyers can go to a local lender or use a subsidiary of a UK bank such as Abbey or Halifax Espana, either directly or via a broker. Conti Financial Services, an overseas mortgage specialist, says local lenders often offer better deals than UK banks, so buyers should not necessarily go for household names.

Larger overseas banks typically have English-speaking teams.

Mortgage rates vary significantly even within the eurozone. A typical variable rate is 3.1 per cent in France, 3.7 per cent in Spain and 4.2 per cent in Italy. In undeveloped markets it could rise to 7 per cent.

Source:  Financial Times