Savills urges investors to consider 'currency issues'

17 September 2007
People considering buying property overseas should always consider the possible risks associated with buying and borrowing in different currencies, according to one expert.

Miranda John, international manager at Savills, said that currency fluctuations and interest rate rises could mean that monthly mortgage repayments can increase.

If an investor borrows a mortgage in euros and the pound falls against the single currency, then repayments are likely to be higher, Ms John said.

Additionally, if a buyer borrows in sterling and then interest rates "go the wrong way", the investor is likely to have a debt on the property that is greater than its value, she added.

"There is no simple answer to the currency thing; it is something you need to consider and look at both options," she advised.

Matthew Weston, manager of overseas mortgages at Blevins Franks, recently urged people considering taking out a foreign currency mortgage to speak to a financial advisor.

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