Guides
Borrowing against a UK home to buy in Burgundy
Understand further advances, remortgaging and net usable funds before treating equity in your UK home as a Burgundy purchase budget.
Contents
“We have enough equity in our UK home” is not yet the same as “the money is available for our Burgundy purchase”. Between those statements sit a credit application, a lender’s decision, costs and a release date. Before using this funding in a property search, establish what the borrowing would actually provide and which home would stand behind the debt.
Two proposals can produce very different amounts of new cash
A further advance means additional borrowing from your existing mortgage lender, typically at a different rate from the original loan. MoneyHelper explains that the additional debt is secured on the home, which may be at risk if repayments cannot be maintained.
Remortgaging involves a new mortgage with a different lender while keeping the property. Much of the new borrowing may therefore repay the existing mortgage. Comparing the headline loan amounts or monthly payments alone would miss a basic distinction between the two proposals.
Ask the lender or adviser: “How much of this proposal repays our existing debt, and how much could become available for the French purchase?” Request the answer with its assumptions. The estimated market value of the UK property does not itself confirm that additional funds will be released.
Work towards usable funds, not the biggest headline number
Start a working calculation with the proposed new borrowing. Identify existing balances to be repaid and charges that would be taken from the proceeds, keeping separately paid costs apart. The figure you want is the additional cash available, rather than the size of the new mortgage.
Keep this calculation in pounds until it has been checked. Show the French purchase budget separately in euros and date the conversion assumption. That makes it easier to see where a change could affect the search. The government’s overseas property guidance highlights borrowing terms, charges and currency fluctuations as matters to examine.
A cost should neither vanish because it is financed nor be deducted twice because it appears on two documents. Where a fee is added to the loan, ask how that affects the total cost. Where an adviser charges separately, keep the expense visible outside the calculation of the lender’s net payment. This is a comparison worksheet, not a substitute for the actual offer.
Tell the lender what happens to the UK home
Explain the intended use of the money and your plans for the property supporting the borrowing. Continuing to live there, letting it or moving to France are not details to leave unstated. Ask which terms apply to your actual proposal instead of assuming that an approval given for a different arrangement would carry across.
When considering the future commitment, use expected income and expenditure after the purchase, not simply today’s household budget. A sterling loan alongside future income in another currency deserves a specific discussion with the adviser. The exercise is to understand the commitment and alternatives; it is not a recommendation of a product or borrowing amount.
Separate an indicative budget from a release date
Ask which steps remain between the illustration and the availability of funds, and what evidence is still required. Tell the French notaire how the purchase would be financed before making contractual commitments. The UK funding timetable and the proposed French contract need to be considered together rather than left for the final week.
If you are considering a French loan instead, our guide to French mortgages for non-residents deals with that different route. For the property search, label the budget as provisional or confirmed. It is much more useful than a headline borrowing figure from which nobody has yet subtracted the existing loan.