The second objective of reducing capital borrowings is achieved by initially borrowing in a currency that is considered ‘strong’ against your base asset at the point that you take the loan out and hoping that historic trends repeat themselves and that the currency ‘weakens’ over time. Guidance on the most appropriate time to switch currency and make capital savings is vitally important in order to capitalise and reduce borrowings. 

If a client were to borrow GBP 150,000 from a bank in the UK at his base currency at 6% on an interest only basis it would cost him GBP 750 per month.

If the same client takes advantage of a currency mortgage, and after some currency analysis he decided to borrow Swiss Francs, then he would be charged 3% and so his monthly interest payment would be GBP 375, which would greatly increase profit.

The major advantages of currency mortgages over and above traditional mortgages are that as well as reducing outgoings; clients can switch between currencies on a quarterly basis and therefore take advantage of weakening currencies, which in turn will reduce capital borrowings. 

The relationship between the British pound and the Japanese yen over the last 10 years has been such that if a client got the timing absolutely perfect, then as well as reducing monthly interest payments by 75 percent against GBP rates, they would have also knocked off a staggering 35 percent from their loan.

It is important to understand that currency mortgages can also work against individuals. As such, when selecting the currency at the outset, sufficient analysis must be undertaken as to which currency is the most appropriate both from an interest rate basis and also from its strength in relation to the individual’s base currency. Furthermore, the whole mortgage package must be managed on a regular basis in order to make sure that both objectives are being achieved. 

Bayswater Group has established the International Mortgage Desk in order to address the property needs of our international clients.

This service is aimed at clients who are looking to do one or more of the following:

1)     Get a better deal on existing borrowing

2)     Release equity from existing property

3)     Purchase new property

4)     Establish sophisticated multi-currency mortgages

A Foreign currency mortgage is a mortgage which is repayable in a currency other than the currency of the country in which the borrower is a resident. Foreign currency mortgages can be used to finance both personal mortgages and corporate mortgages.

Foreign Currency mortgages are offered to more discerning investors and therefore often have additional advantages including:

Currency flexibility  - Many lenders will allow the investors to switch the base currency of the mortgage at nil cost or minimal cost

Early Repayment - To repay large proportions or the whole loan early at nil or minimal cost

Repayment Savings - By taking out a Mortgage in a Currency that has lower interest rate you could lower your monthly payments considerably.

Managed Currency Mortgages - A borrower can allow a specialist currency manager to manage their loan on their behalf, where the currency manager will switch the borrower's debt in and out of foreign currencies as they change in value against the base currency. A successful currency manager will move the borrower's debt into a currency which subsequently falls in value against the base currency. The manager can then switch the loan back into the base currency (or another weakening currency) at a better exchange rate, thereby reducing the value of the loan.

We are fully independent but our main lenders include:

·         HSBC

·         Lloyds TSB

·         Royal Bank of Scotland

·         HBOS

·         National Australia Bank

·         Abbey National

·         Portman Building Society

·         Commonwealth Bank

·         AIB

·         ANZ

·         Repayment Mortgages

·         Interest Only Mortgages with a flexible repayment vehicle

·         Variable Rate Mortgage

·         Fixed Term Mortgages

The list of countries that we can arrange to is extensive, however we have most experience in property lending to the UK, Dubai, Hong Kong, Portugal, Australia, New Zealand, Spain, France, Canada, Singapore and USA.

We can also offer you advice on how to fully protect your property and other assets in the event that anything happened to you or a member of your family.

For further information or to take advantage of this service please call us on   +66(0)2 6637532  or email info@bayswater-group.com