First National is breaking the barriers of the overseas mortgage market with the three-year British mortgages abroad mortgage.
The mortgage is only available for the purchase of properties in Orlando, Florida and not for any other areas. It is aimed at British borrowers who want to purchase a holiday home or a second property in the state.
It has an interest rate at 7.3 per cent for a three-year period, with a maximum loan to value of 80 per cent. The mortgage has a redemption penalty of three months interest in the fixed-rate period and does not have any compulsory insurances.
According to Moneyfacts First Nationals offering is the only US type mortgage. Six other companies offer mortgages for overseas properties and all are restricted to Europe. Woolwich only offers mortgages for France, Jyske Bank, Newcastle and Norwich & Peterborough building societies offer ones for Spain and Gibraltar, and Barclays Bank offers ones for France and Spain. First Nationals parent company Abbey National offers mortgages for properties in France, Italy, Spain and Portugal.
However, properties purchased in the US do have to be insured, with the exact type of insurance depending on the area. Houses in Florida must have flood insurance as this is an area that is hit by hurricanes and tropical storms every year. This can be arranged separately and adds to the cost of the mortgage.
This mortgage could be extremely attractive to borrowers who are looking to move to the US and prefer to stick to a UK-style mortgage rather than a US one. According to the British Consulate in Miami the number of UK expatriates estimated to be living in the state has risen from 250,000 in 1997 to 500,000 in 2001.