In the UK over 99.9% of mortgages are borrowed in Sterling and interest

Despite changes in 2005, the domestic interest rates in the UK are still low by UK standards. However, they are significantly higher than rates in Switzerland, Japan, America, and indeed the Eurozone. Consequently, you can currently take out a mortgage in Swiss Francs, Yen, Euros, $ Dollars, or Euros, convert the money you've borrowed into sterling, secure the debt against the house you own in the UK, and end up paying a much lower rate of interest.

Judged against history, you may think that interest rates in the UK are currently low. But look at the following 3 month money market interest rates. You'll see that the UK interest rate is significantly higher than the rates in other parts of the developed world:

Japanese Yen 0.12%

Swiss Franc 1.03%

Eurozone 2.46%

US $ 4.48%

£ Sterling 4.64%

(3 month Money market Rates as at 9/12/05, source: Financial Times)

Monet market interest rates are the rates that banks lend currencies to other banks. So you won't be able to take your mortgage out at these keen rates. You'll have to pay a premium and the set up costs for your mortgage will be higher. Nevertheless, if interest rates remained at current levels, you could save a lot of money on your interest payments.

So why are 99.9% of UK mortgage holders still turning their backs on lower international interest rates? It's a fact that most UK borrowers are unaware of the availability of foreign currency mortgages - but that's not the main reason. The primary reason are the extra risks involved.

All interest rates can change and the gap between sterling interest rates and the foreign currency rate you've borrowed in, could slim down. If this happened, the interest rate savings would reduce and, if the trend continued, would make the foreign interest rate more costly than a standard UK mortgage.

But the most significant risk by far lies' in changes in currency exchange rates. If you borrow in say, Swiss Francs, you eventually have to pay the loan back in Swiss Francs. That would be fine if the Swiss Francs /Sterling exchange rate was fixed – but it isn't.

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Did you Know?
The concept of medical insurance was proposed in 1694 by Hugh Chamberlen. In the late 19th century, early medical insurance was actually disability insurance, in the sense that it only covered the cost of emergency care for injuries that could lead to disability. This insurance model continued until the early 20th century when patients were expected to pay all other health care costs out of their own pocket under what is known as the fee-for-service business model. Modern medical insurance programs emerged mostly after the 2 nd World War.

Today in the UK, most comprehensive private medical insurance programs cover the cost of routine and planned health care procedures, although emergency care is still largely the province of the National Health Service.

Did you know?
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Did you know?
A survey conducted by Experian, the largest UK credit reference agency, found that 54% of applicants for personal loans were refused. Of those accepted for a loan, 43% were offered a higher rate than the rate they saw advertised. That's why, if you're searching for a personal loan, it's a good idea to apply through a loan broker who will know the lenders who'll best suit your circumstances.

Did you Know?
According to Experian the largest UK credit agency, 53% of loan applications are refused. So if your credit history is imperfect, apply for bad credit loans through a loan Broker. The Broker will consider your credit history and apply to the lender most likely to favourably look at your application. That way you get your loan with the minimum fuss and at the best rate available to you.