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Financial Conduct Authority, FCA reference No 587075.  Registered in England, company No 07714109.  Registered office 77 Woodcrest  Road Darlington DL3 8EE

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Foreign Currency Mortgages

Foreign currency mortgages are simply mortgage loans where you borrow money in a foreign currency.  If you use this type of mortgage to buy a house here in the UK, the money you borrow will be converted into British pounds (Sterling) to enable you to make your house purchase.  Your mortgage debt will, however, remain denominated in the foreign currency.

There are two potential differences compared to borrowing in Sterling.  Each difference could be to your advantage or disadvantage.

The money that you borrow will be a foreign currency.  This means that the value of your debt may increase if the British pound falls in value compared to the currency that you borrowed.  Of course, if the relative value of the British pound increases, the value of your debt reduces.  The Sterling amount that you pay monthly could also be affected by changes in exchange rates.

Interest rates in the home country of the currency that you borrow may be lower than British interest rates.  Of course, interest rates in that country may increase substantially and unexpectedly.

Home in  the frame

If an increase in the foreign interest rate combines with a relative fall in the value of the British pound, both your mortgage debt and your mortgage repayments could increase dramatically.  Be sure that you’re aware of the costs and hidden pitfalls before taking any mortgage.  Read our lenders’ costs document for more information.

As independent mortgage brokers we’re well placed to find the cheapest mortgage rates that fit your individual needs.

To get on with finding the best mortgage deals for you, just contact us to discuss your needs.

Your home may be repossessed if you do not keep up repayments on your mortgage

Changes in the exchange rate may increase the sterling equivalent of your debt

Our typical mortgage advice fee is 0.5% of the amount borrowed.  This depends on individual circumstances