Most people tend to look no further than their bank or building society for a mortgage. Other people are a bit more adventurous, taking it upon themselves to develop a good understanding of the lenders and products that are in the marketplace and relying on their own knowledge to actively choose a mortgage that meets their own set of criteria.
Some people take things a step further still and get their mortgage in a foreign currency.
It's risky, but in some cases the rewards can be worth it. We take a look at how it works, the potential benefits, the possibilities for disaster and what you can do to minimise the risk. A basic foreign currency mortgage is really not all that complicated. Instead of lending you a mortgage in pounds Stirling, a bank advances you the money in an alternative mainstream currency, such as US dollars, Japanese Yen, French Francs, Euros or German marks. Your mortgage debt remains in the foreign currency and the interest rate you pay is also the one applicable to that currency, not the one denominated by the bank of England base rate.