People considering taking out a foreign currency mortgage in order to finance their overseas property investment should be aware of the risks involved, according to one expert.
Matthew Weston, manager of overseas mortgages at Blevin Franks, said that property investors ought to consider "potential currency inflation risks" when financing their purchase.
"In relation to an overseas property purchase, this simply means that the sterling cost of an overseas property changes due to fluctuations in the rate of exchange between sterling and the currency in which the price of the property has to be paid," Mr Weston explained.
Sometimes exchange rates can fluctuate by as much as ten per cent in short period of time, which could cause problems for people who may have already "overstretched" themselves financially, he warned.
Chris Towner, senior economist at HiFX, recently urged investors to seek advice on how to protect themselves against currency market "volatility".
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