Foreign Currency Mortgages on UK property
Welcome to the UK foreign currency mortgage section of our website.
Very few people know that it is possible to obtain a foreign currency mortgage for UK residential properties. Borrowing in a foreign currency that has a lower interest rate than sterling is an attractive proposition and offers the possibility of sizeable reductions in monthly mortgage payments.
International Mortgage Brokers offers impartial information so that you can decide which product suits your needs and individual circumstances. We have developed relationships with specialist banks who offer the following flexible arrangements to individual borrowers and Special Purpose Vehicles.
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- British Pound (GBP)
- Swiss Franc mortgage (CHF)
- Euro mortgage (EUR)
- Japanese Yen mortgage (JPY)
- US Dollar mortgage (USD)
- Canadian Dollar mortgage (CAD)
- Australian Dollar mortgage (AUD)
Hong Kong Dollar mortgage (HKD)
- Singapore Dollar mortgage (SGD)
- New Zealand Dollar mortgage (NZD)
Lenders will consider requests for borrowing in most major currencies and in some circumstances they will consider making a basket of currencies available.
Whilst it is very tempting to look only at the cash flow benefits of low interest rate foreign currencies, it should not be the only consideration when assessing the suitability of a foreign currency mortgage facility. The effects of fluctuation in exchange rates should also be considered as these can directly affect the size of a borrower's outstanding loan.
If the chosen foreign currency weakens against the value of sterling, the value of the currency mortgage debt will be reduced. Equally, if the chosen currency strengthens, then the sterling equivalent mortgage will increase. In most circumstances a ‘stop loss’ sterling conversion limit is placed on the account to prevent the sterling equivalent loan from increasing more than fifteen percent.
You will find more information relating to the potential rewards_and_risks here.
Foreign currency mortgage – general criteria
Minimum loan amount is £250,000 equivalent
Minimum principal annual income £100,000 or equivalent
Maximum loan to value ratio is 55%
Foreign currency mortgage – currency switching
Lenders may permit you to switch the borrowing from one currency to another, including sterling, to limit your exposure to the currency risk. In some cases, it may be possible to denominate the loan in three currencies concurrently.
Clients who are attracted to the product benefits but unsure of their ability to manage the risks may be able to appoint a third party debt management specialist to manage the currency risk on their behalf. International Mortgage Brokers would be happy to introduce clients to specialist firms if they are interested in this option.
Foreign exchange movements can be sudden and substantial. Clients should only consider taking out a foreign currency mortgage if they are able and prepared to tolerate increases in their monthly repayment and capital debt.
Our office hours are 9am to 6pm every weekday and 10am to 1pm Saturdays.
Call us today on 01225 701840 to discuss your individual requirements