Foreign Currency Mortgages

It's possible to obtain a foreign currency mortgage, for example in US dollars or in Euros, to buy property in the UK. However, this type of loan requires careful consideration. Although interest rates are generally lower, a much higher deposit is required (typically 30-40%) and you also expose yourself to currency risk. If the pound is stable or rises, the borrower benefits. If the pound drops, the borrower will have to pay more. In some cases, borrowers may find their mortgage debt increases as a result of adverse currency movements.

These types of home loans should be left to more sophisticated investors, as there is the potential to get into trouble unless you have a clear grasp on the implications of such a mortgage. In fact, most lenders advise against taking out foreign currency home loans unless you're paid in that foreign currency. Independent financial advice should be sought if considering such a mortgage.