Mortgage term reduced if paid in foreign currency

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by Kay Murchie

According to Alexander Associates Group (AAG), mortgage debts could be reduced if they are taken out in a foreign currency.

AAG, the financial management firm, recommends that overseas property investors should consider multi-currency mortgages if they want to avoid the harmful effects of exchange rate variations.

David Alexander, AAG’s CEO, said you would hope over a period of 25 years that you would clear your whole mortgage if you’re managing it via a multi-currency mortgage.

Mr Alexander added that this method is just like any other type of fund, it is a currency fund and you need a currency manager to move it from one currency to another, to where he perceives the likelihood of sterling strengthening against the other currency.

The group added that multi-currency deals can slash mortgage debt by approximately 5% per annum. However, the group advised that, as is the case with the majority of investments, such deals are considered in the longer-term rather than the short-term.