Euro mortgages what are they and are they good?

hearts

Hi, a friend phoned me and told me his FA is offering to remortgage his properties into one mortgage in Euros. He says the rate is something like 3.75.
I don't have more details at the moment but was wondering if anyone here could shed some light on this and let me know of any possible pitfalls.
Thanks

beingjdc

The main pitfall would be that if you borrow £200,000 in Euros, that's €300,000. If the Pound falls 10% against the Euro, that means you owe just over £220,000 - so you'll effectively have paid 14% interest in a year. Of course, the pound could go up against the Euro too, it's a gamble.

dwsjarcmcd

It is a gamble, a few years ago brokers were selling the same thing but against the dollar, interest rate increased and the exchange moved against these. Result is people locked into mortgages with hugh ERC's which are costing a fortune. Be careful with these.

dunstonh

Euro mortgages are not regulated. Get the person to check the "FA" is actually FSA authorised. Unregulated or european markets (i.e. targetting ex pats) are often where the bad advisers that can no longer operate in todays higher regulated conditions often end up.