Warning over foreign currency mortgages

Fri, 13 Jul 2007

Foreign currency mortgages can be a "risky" way of investing in emerging property markets, Britons have been warned.

Newer property markets can be unstable, thereby exposing investors' cash to fluctuations if they seek to take out foreign currency mortgages, said Kevin Fleury, the managing director of Smart Investment Property.

"When you enter a new country for example, Morocco, there's a big rush, not just to buy but to build and to do that you need a stable level of supply and demand," he explained

However, the expert also noted that foreign currency mortgages are becoming "very trendy" and are frequently used in larger, more established property markets such as the US, France, Canada, Spain and Portugal.

He advised Britons to be aware of the exchange rate when looking to make money out of foreign currency mortgages, for example switching a mortgage to US dollars would reap the benefits of the pound's current strength.

Smart Investment Property specialises in the purchase and sale of overseas property as a means of generating profit. A large number of Britons prefer, however, to take out a mortgage on a property outside the UK to use as a second or retirement home, with Spain one of the most popular choices.

Warning over foreign currency mortgages

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