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Sunday, April 13, 2008
damok666
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Does anyone know much detail about Multicurrency mortgages?
I've not seen much in the way of downsides to them but do the mortgages experts among the members know much about them? Are they easy to arrange in Spain?
Thanks in advance.
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14 Apr 2008 3:39 PM
Smiley
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They are a rare breed in Spain and only available from a very limited direction - whether they are a good idea or not I guess is upp to you - there is always a risk as the currency of the mortgage (e.g Swiss Francs) fluctuates against the Euro and Sterling so there could be a downside - interest charges can be lower (Swiss approx 3.9% at the moment). The lenders that do offer them soemtimes want the borrower to have earnings in the currency of the loan although this can be assessed very much on a case by case basis. If it is remortgage you are considering then it should be noted remortgage expenses are still going to be roughly 6% of the loan size so that has to be factored into the equation - its going to cost 6000€ per 100,000€ Euros in switching the deal - upside is that it can be arranged on long term interest only -
You will see it is not straightforward but it most certainly is not for everybody.
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23 Apr 2008 2:51 PM
damok666
Apartamento
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Thanks for the reply Smiley. I saw a couple of adverts in the CB News I think but obviously they just highlight the better aspects.
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23 Apr 2008 5:00 PM
Smiley
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There are many people promoting the concept but nothing is ever as straightforward as it seems - while the benefit of the lower interest rate is great there are very very few people that understand the complexities of managing the exchange risk and believe me there is a risk. Swiss Franc mortgages were being heavily pushed in the UK pre regulation in the late 80's - rates at 2.7% while sterling was about 7.5% - looks very attractive but a lot of people ended up financially disadvantaged by having switched to Swiss.
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Smiley - patrick@marbellamortgages.com www.marbellamortgages.com
Sarcasm is the lowest form of wit .....but any form of wit is an achievement
NO MATTER HOW MUCH MONEY YOU HAVE GOT, IF YOU HAVE NOBODY TO SHARE IT WITH, THEN ITS JUST NUMBERS IN THE BANK.
TO ESCAPE CRITICISM DO NOTHING, SAY NOTHING, BE NOTHING!
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02 May 2008 6:29 PM
advisor
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Great tools if you understand and have the time to "manage" the currency markets, extremely high risk as has already been mentioned, most common used over the last 5 years has been the Yen.
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05 May 2008 9:42 AM
Smiley
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Yen too volatile in my opinion - Swiss Franc is more stable - even so currency risk has to be managed.
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Smiley - patrick@marbellamortgages.com www.marbellamortgages.com
Sarcasm is the lowest form of wit .....but any form of wit is an achievement
NO MATTER HOW MUCH MONEY YOU HAVE GOT, IF YOU HAVE NOBODY TO SHARE IT WITH, THEN ITS JUST NUMBERS IN THE BANK.
TO ESCAPE CRITICISM DO NOTHING, SAY NOTHING, BE NOTHING!
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