Borrowing at U.S rates

ashbourne

Is it possible to borrow money at U.S rates as it is so low?

Would you have to have security to do so for a U.K citizen i.e property to mortgage/investment against?

What would be the potential hazards of doing this if it is possible?

purch

What would be the potential hazards of doing this if it is possible?

You would have a liability in USD, when presumably your assets would be in GBP.

You would have an exchange rate risk, which whilst it can be hedged would dilute most if not all of the interest rate benefit.

Ian_W

Apart from the risks outlined by purch what makes you think US loans would be markedly cheaper? Just cos the Fed bank rate is doesn't mean a mortgage or personal loan will be.

I don't know the first thing about US loans but a google search turns up HSBC US [Florida State to be precise] rates HERE* and range from 4.625 to 5.625%. Moneyfacts best buy UK 2yr fixed are HERE and range from 4.49 to 6.45% [toggle for other periods and types] which hardly suggests a huge gulf between them.

It's very doubtful if a US lender would be interested anyway due to the difficulties and expense they would face if you fell in arrears and I doubt it would be lawful as they would not be FSA regulated.

*If the link doesn't work [seems erratic!] go to the bottom of this page and click on "View Rates".