Overseas Mortgage Interest Rates

MWSB3346

Don't know if anyone can help - but I need to remortgage in July 2007 and I have been trying to investigate "buying" a mortgage from an overseas bank, namely Japan where the interest rates are around 0.5% and the Japanese banks are offering 20year mortgages fixed at 2.9% !

There appears to be no legislation preventing borrowing from outside the UK it is just finding a lender who will extend their service to the UK ?

Any ideas ?????

plane_boy2000

I am sure that there is no legal reason why you cant, however if it was that easy wouldnt we all be doing it..............

DavB93

If anyone does know anything or if you find out anything I'd be very interested too.

danjberry

i dont really understand. you want a japanese bank to lend you the money to remortgage your british home?

i would of thought the main reason they cannot do this is because of the FSA, secondly they will not have a panel of recognised valuers to value your property, thridly if they could im sure they would realise out interest rate are a lot higher so would charge you more to make even more money

MarkyMarkD

If you borrow in a foreign currency you are exposing yourself to huge exchange rate risks.

People who have done this in the past have lost out hugely because the pound has depreciated against the currency they borrowed in. For example, you could borrow £100,000 and then find that you owed £125,000 after a few years, if sterling depreciated by 25% against the Yen.

It really isn't a good idea except for the few people who earn their money in another currency or who have so much money that they can afford to gamble in this way.