Local banks now offer mortgages at an initial interest rate of 9.5% . reducing to 8.5% in the second year. It can be for a term of 25 years depending upon the applicants time to retirement. It is limited to 75% of the value of a property as judged by the bank and available only on completion of the puirchase. In addition there will bre a one off charge of 8% of the property value for tax, notary and registration fees. Withdrawl from the mortgage will result in a 25 fee on redemption. This HIGH RATE of EURIBOR + 4.5% is because credit is very tight and the market is immature This is one reason property why prices are comparatively low. The Cape Verde market has the potential for attractive capital appreciation. A rental market will develop.. Some Cape Verde developers will offer mortgages to off-plan buyers, perhaps at more reasonable interest rates. If mortgages become more readily available at attractive rates, prices will rise.. The pioneer investors who spot the potential make the most investment gain.
Mortgages are available on completion. But this does not help to fund an investment. The payment schedule for buying an off-plan property in Cape Verde is more aggressive than in a country like Spain. A typical plan in Cape Verde will include 5 stage payments before completion. The investor or home buyer will need to fund these payments but might get a 70% "mortgage" on the valuation of the property when they sign the Escritura.
Currency: of loan Euro €
Loan Amount: Up to 70% of valuation
Subject:to completion of purchase of a property
Loan term: Up to 15 years
Type of mortgage: Repayment mortgage – capital and interest
Interest rate: Variable rate: 6 months EURIBOR + 3.75 currently equates to approximately. 7%
Mortgae at fixed interest rate: approximately. 8%
Bank arrangement fee: 1.25% fee on provision of mortgage
Early redemption penalty:within first 5 years: 1-2% of the outstanding balance.but nothing after that timne/
Stage payment financing often over five payments
Collateral mortgage on a real estate in Cape Verde available from local banks on completion only
From last April 2006 it should have been possible to invest personal pension money from the UK into buy to let property including property in the Capoe Verdes. Money going into such a fund , known as a Self Invested Personal Pension will be free on income tax and therefore worth 40% more to higher rate income tax payers. Also the fund can borrow up to 50% of its value for investment. Rental yield and capital gain on a property in the Cape Verdes can then be used to find a retirement annuity. You can withdraw 25% of the fund again at age 55 but the rest will be locked in to provide retirement income. Consult a financial adviser or we can tell you what we have found out, so far. The scheme is still rather vague and has been postponed.
Interest rates in the Cape Verdes are so high to prop up the national currenncy that it is not worthwhile borrowing there. It is possible to find Euro mortgages from Portuguese banks, which reduces the currency risk in borrowing compared to sterling. Cadogan in the UK is considering offering sterling mortgages in the CapeVerdes. But if you are planning to fund your borrowings by letting the Cape Verde property to British Isles visitors, it would make more sense to increase your existing mortgage on your UK or Irish home.