convert my mortgage to US dollars 30 November 2007 at 3:35PM in Mortgages & endowments 5 replies 675 views

balmaha_2

Hi,
is it a good time to convert my mortgage to US dollars ?
From the sounds of it the dollar is going to continue downwards.
What are your thoughts?

C

luckyfool

balmaha wrote: »

Hi,
is it a good time to convert my mortgage to US dollars ?
From the sounds of it the dollar is going to continue downwards.
What are your thoughts?

C

If you have to ask the question, then the answer is no. Foreign Currency mortgages are extremely risky and unsuitable for all but the most sophisticated and adventurous. The only conceivable reason why you might want one is if you have a link to that countrys currency. i.e. if you have an income in dollars, or own property over there.

If you converted your mortgage to dollars now then granted the dollar could continue to weaken, but it could also strengthen against Sterling and you could turn a £100,000 mortgage into a £150,000 very easily.

Steer well clear.

jarrod1

that would mean that your mortgage would increase, current rate is approx 2.06 to 1 pound, i cant see the dollar getting much weaker than this, it will get stronger and then it would cost you more pounds to pay it off.

abadstate

The US dollar would continue to go down as this is what is intended by the US government.

The US government debt is high at $9 trillion, due to this high amount, a weaker dollar will help as US bonds are issued in dollars.

Jonbvn

There was an article on this in the Torygraph in July.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/07/14/cmforex14.xml

It would seem like a high risk strategy primarily for wealthier borrowers, who can afford to "gamble" with their mortgage.

Generali

If you can afford for your mortgage to go up by 75% over a year or 2 (worst case scenario I reckon) then it might be worth a punt.

I reckon that foreign ccy mortgages are suitable for the very rich or those with an income in that ccy and nobody else.

You pays your money and takes your choice though.