mortgages in egypt

[alison9071]

hi i dont if this will be of any use to anyone but today i was told by the HSBC that they are now offering morgages to non egyptians wanting to but property in egypt there will obvousily be restrictions firstly you will need to be a HSBC customer in the uk and open a bank account in egypt they will offer 60% on the property and at a rate of 6% the property will also need to registable of course i am waiting for an email from the HSBC confirming this and setting out the full crieria for getting a morgage and i will post it as soon as i get it thank you alison

 

[try-one]

Hi Alison,
Do you have any news regarding the mortgages?
Would it be secured on the Egyptian property or would it require equity in the UK property?
(any links or contact details from HSBC?)
thank you
David

 

[dave99]

HSBC offer of Mortgage

Hi

I also met the HSBC manager in Hurghada last week and he told me about about the 60% mortgages, but not as cheap as 6%.

They are for a short term maybe up to 7 years, and have to be checked against all of your other credit worldwide, so may not be any point if you can get the money in the UK as an extension on your UK property or as a personal loan which may be easier to handle. Property registration in Egypt is a potential concern and will be even worse when complicated by a mortgage, but is is now more easily completed than it was year ago.
Your re-payments will also be subject to currency flucuations which you cannot control and will create more problems. They will do a GB sterling loan but at a higher rate of interest.

 

[BB72]

Hi

I also met the HSBC manager in Hurghada last week and he told me about about the 60% mortgages, but not as cheap as 6%.

They are for a short term maybe up to 7 years, and have to be checked against all of your other credit worldwide, so may not be any point if you can get the money in the UK as an extension on your UK property or as a personal loan which may be easier to handle. Property registration in Egypt is a potential concern and will be even worse when complicated by a mortgage, but is is now more easily completed than it was year ago.
Your re-payments will also be subject to currency flucuations which you cannot control and will create more problems. They will do a GB sterling loan but at a higher rate of interest.

i would have thought this would make it more secure and safer i.e no title deeds no mortgage

 

[Peter Mitry]

Alison
Are you confident that you will get these mortgages from HSBC at 6%? This is completely different from offers made to other very large Developers in the same area. I would be worried about offering your projects with a mortgage to my clients unless you can absolutely guarantee that it will happen on the terms you publish. Do you have a letter from HSBC with the full terms of the offer?

 

[dave99]

At what point in the build cycle can you borrow

Excellent work. I am very interested to hear the results of your investigations. I have heard reports that HSBC are starting to offer mortgages, but don't know of many other banks.

Are the mortgage products you are planning on offering only going to be available for UK residents, or would you be able to help buyers in other EU countries (including very dodgy EU countries where the majority of people able to afford to buy international property don't have much of a paper trail to show where they got all their money from!)?

At what point in the build cycle can you borrow if you are buying off-plan

I know that HSBC will lend on my development once the shell is finished and we start on the internal work.

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[Peter Mitry]

There is nothing wrong at all with what some brokers are doing to try and open up the mortgage market in Egypt; it will benefit everyone.What I object to is Developers publishing glossy brochures saying they have an agreed mortgage with an Egyptian bank over 12 or 15 years at 6.5% interest. I am sure that this will come and I would be delighted if someone can publish a letter from an Egyptian bank with an offer to this effect. Any Developers seen such a letter? It would be great to know its possible but I suspect that as of right now we won't see too many published!

 

[dave99]

What security is needed

..
What security is needed by banks etc before the will lend on a property in Hurghada.

Do they need a deed like they do in the UK, if so how can this be provided on an 0ff-plan purchase.

.
.

 

[propertastic]

I really need some clarification on this because the Complete Guide goes to press in the next 24 hours and the information that I have currently is that the interest rate that HSBC is charging is in the region of 13.5-15% (Egyptian Interbank rate is 12%)

I'll look a complete idiot if it turns out to be true that the rates are really only 6%.

The 13.5 - 15% rate comes on pretty good authority though.

 

[propertastic]

I know that borrowing in most countries is based upon the Interbank rate of the currency involved plus maybe 1.5 - 2%

As the Egyptian Interbank rate is so high - 12% - I can understand that loans in LE would command interest rates of 13.5 - 15%

However, I would have thought that loans in GBP or EUR are based on either LIBOR or EURIBOR plus a few percent.

As a result, I would have have that Egyptian mortgages in GBP should be just slightly above what one would pay for a mortgage at the moment in the UK.

 

[awahee123]

Maybe like everything else foreign investors may have to pay a premium.

 

[DC]

There is an egyptian mortgage broker I am sure around, he called me today, he must know. The reality is certain banks were in earlier than the others. Mortgages are still pretty new to Egypt. The french on Societe General were one of the first actually I think they were the first in the whole of Egypt, worth to give them a buzz. Come on we are in the 21st century do some quick searches and talk to banks directly.

 

[alison9071]

I really need some clarification on this because the Complete Guide goes to press in the next 24 hours and the information that I have currently is that the interest rate that HSBC is charging is in the region of 13.5-15% (Egyptian Interbank rate is 12%)

I'll look a complete idiot if it turns out to be true that the rates are really only 6%.

The 13.5 - 15% rate comes on pretty good authority though.

Egypt is not a third world country, but it is a developing country. It has no history of stability since the demise of the monarchy in the fifties,when the egyptian pound was one to one with british pound.

There is little to no chance that any foreign investor will be able to borrow money for any thing even off the biggest bank in the world (HSBC)

As a resident I enquired about a credit card here in Egypt, I have lived here for two years and have passed a very acceptable amountof money throughmy HSBC account. I also bank with them in the uk.

To geta credit card with alimit of 10000 le around 950 GBP all I have to do is lodge 20000 le with the bank.

This is worse than a debit card.

In summary any one that offers a mortgage to foreign investors is lying, it is a sales ploy to get people to put their life savings down as a deposit,expecting rental returns and loans that will not happen in the short term.

When people default the developer relies on the fact that the client will be too embarassed to make a fuss and walk away from their deposit.

Any one in this situation should realise they are legally allowed to claim back 90% of any monies paid by Egyptian law, making the mistake a little easier.

All banks in Egypt offer loans on property, non offer mortgages because in Egyptian Law,should the borrower default on payments,the lender has no rights to reposses the property.

So 6%, 10%, 15% or 50% the offer will never be realised in the current market place.

My humble advice,as a developer who wants to sell as many properties,as quickly as possible, is that, if you have not or can not pay for your investment from funds or equity you have in your own country, Do not get involved.

It is easy to let your emotions run away with you when you are having fun in the sun, but remember, act in haste,repent at leisure. There are thousands of properties for sale, take your time, consult a solicitor,do not be rushed in to anything. A respectable developer will allow youtime to check. But above all take advice from independant purchasers, there are hundreds on the web.

I hope this has been of some value to some people

Regards

Andy Harris

 

[alison9071]

Alison
Are you confident that you will get these mortgages from HSBC at 6%? This is completely different from offers made to other very large Developers in the same area. I would be worried about offering your projects with a mortgage to my clients unless you can absolutely guarantee that it will happen on the terms you publish. Do you have a letter from HSBC with the full terms of the offer?

Peter we do not offer any loans on any developments, can you tell me where you got this figure as I think my wife may be going mad!

 

[alison9071]

Who knows. All I know is things can change very quickly in Egypt... my lawyers and consultants are always having to re-check on current laws on foreigners for every aspect of my business in Egypt...

I have spoken to many lawyers in egypt, non give the same answer, also consulted the govermental bodies who are presently out at court to give definitive explanations. I have tracked down a maverick lawer (that reminds me of Love joy the antique dealer) who is british and has dealt in arabic countries for some years. His name is Phil Morris of Law limited and can be contacted at [email protected], he is registered by the british law society. (sothat will cost more money, but you can negotiate)

Andy

 

[dave99]

Mortgage or personal loan

"All banks in Egypt offer loans on property, non offer mortgages because in Egyptian Law,should the borrower default on payments,the lender has no rights to reposses the property."

Hi Andy

What is the difference between a "loan on property", and a "mortgage" in Egypt.

Any idea what the exact Egytian LAW number is that covers this issue please.

..
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[try-one]

Conclusion?

So, there are NO mortgages available in Egypt?
This information would be interesting as it helps to drive the prices and adds liquidity to the market.

 

[awahee123]

I would be surprised if there wasn't going to be any mortgages available in the Egyptian market,Lets hope someone can provide some concrete information regarding this topic.

 

[Peter Mitry]

Thank you Andy! This is what I have been saying for months. There are indeed brokers around offering 65% LTV on Egyptian properties at 6.5% interest rates but to my certain knowledge the company concerned could not confirm that any mortgages have yet been completed.
They present a clients personal documents to Egyptian banks, along with the due diligence on the project, and charge clients an up front arrangement fee.
The client then gets 'an offer in principal' from the Broker. This is not the same as a mortgage offer from a bank and anyone following this route should be absolutely clear that when the time comes to pay the Developer they will still have to find the money from somewhere or risk losing their property.
Please someone tell me I am wrong?

 

[Peter Mitry]

No matter what the brochures say there are no mortgages as yet; I am waiting for just one single buyer to show me a confirmed mortgage offer from an Egyptian bank. I am sure that we will all be delighted.
Don't misunderstand me, EVERYONE wants it to happen but NO ONE wants to be lulled into a false sense of security, being told their mortgage is secure when in reality it is not.