UK Mortgages: International Euro Currency Mortgages

International Euro Currency rate Mortgages

We are proud to introduce the Exclusive UK euro rate mortgage. The euro rate mortgage will be available to those clients with high net worth profiles exclusively through New Mortgage Finder. Intrepid homeowners are saving themselves thousands by switching their home loans to Euro currency rate mortgages, but not without some risk" says Steve Morgan from New Mortgage Finder.

As always with currency mortgages, euro currency exchange is an area you should think carefully about when considering a euro product secured on your UK property. Currency mortgage are not new, so why is this scheme different.

The reason this euro currency mortgage is different is because it has a margin equal to the rates in France or Spain without the need to have income in euros. Unlike mortgages available through major Banks here in the UK who carry a variable rate mortgage tend to be pegged at about 1.5 per cent above base rates, that should mean a euro-mortgage costs about 5.3%. Just think of the savings compared to a typical UK variable rate of 6.6%, the argument goes.

Unfortunately, things are not quite that simple. Both Barclays and Abbey National require that anyone taking out a euro-mortgage must actually be paid their income in euros. The reason behind such thinking is that they do not want their borrowers trapped by adverse currency movements. And yes the risk is there, but since the euro has come in to play it has been no less volatile than the UK base rate.

Lets take a look at the figures in Dec 1998 the euro base rate was 3.2465% at Dec 2005 it stood at 2.1350%.this means 100,000 borrowed in 1998 would have cost 629.77 per month 7yrs later the monthly cost was 572.10. The same loan in the UK on BBR would have cost 811.49 and 699.23. But this is not the only comparison needed. You have also to consider currency exchange, because you will buy a mortgage which pays out in euros therefore you will need to convert the amount released in to sterling, get the timing wrong and this will cost you, get it right your receive a nice discount. the exchange rate over the same period was 0.636 today it is 0.673. This converts to £63,600 would have bought you 100,000 euros today you would need 67,380 to buy the same amount. This would have work against you, with an extra £3,720 needed topay off this mortgage. To see the real cost of your euro mortgage you must compare and use both these calculations.

If this has not out you off and you still believe a euro mortgage on your UK property is what you need. So if you are really good at predicting currency movements, this is definitely the one for you. If, on the other hand – like many – you can’t work out from one week to the next where all the money in your bank account has gone, it’s probably more sensible to stay away.