Swiss Franc Mortgages

If Swiss interest rates continue to stay well below UK interest rates over the five years, borrowers will come out on top.

Swiss mortgages are extraordinary value as they are based on the Libor rate, generally much lower than the Bank of England base rate. Although lending measures can be strict it is worth pursuing a swiss franc mortgage.

A huge majority of property purchasers still get their mortgage from a mainstream lender, but there are other options on the market. With the world becoming a smaller place, foreign-currency mortgages are becoming the loan of choice for astute home owners and landlords. Of the foreign currency mortgage options open to expats, the Swiss Franc Mortgage based product have become the home equity loan of choice for many UK home owners.

Whilst British and European rates of interest are still rather low, particularly in comparison with the 80?s, interest rates in Switzerland are a lot lower. Many of the banks in the British offshore markets offer Swiss Franc mortgages to those purchasing in the UK or Ireland at interest rates under 4%.

A lot of property holders do not realize they have the option of borrowing the money for their house purchase in a foreign currency by utilizing a multi currency mortgage.

The greatest worry with foreign/multi currency mortgages has to be currency fluctuations. In the case of a UK property, if Sterling strengthens against the Swiss Franc, then the borrowers risk has paid off; they would have to convert less Sterling into Swiss Francs to repay the loan than the Sterling value of the capital they borrowed in the first place. A rate of interest saving and pay back less than you borrowed, that's the perfect scenario.

Yet, if the rate of the Sterling drops against the Swiss Franc they get the worst-case scenario, and they'll end up paying back more money than they borrowed. Therefore in this circumstance, taking out an overseas mortgage leans on the hope that Sterling will not drop against the Swiss Franc. In essence, they will have converted their mortgage into a currency speculation, securing your most expensive possession, your home, against it! There's big savings to be made - but there's a gamble.