Foreign Currency Mortgage

Foreign currency mortgages used to be very popular, but they became less prominent in the market due to the financial crisis in 2007. However, there has been a resurgence in their popularity, especially given the increase in property purchases by foreign nationals, be these in the UK or prime markets around the world. As a result, many lenders have reintroduced these mortgages, offering them to select borrowers.

Foreign currency mortgages enable overseas buyers to purchase property in a foreign currency.

Foreign Currency Mortgage

Understanding Foreign Currency Mortgages

You can take out foreign currency mortgages on overseas property purchases. In effect, this means that foreign investors can use foreign currency mortgages to buy property in the UK, just as UK residents can use a foreign currency mortgage to purchase property abroad.

This type of financing allows you to take out a property loan in a currency that is practical for you if you buy a property abroad. As with a standard mortgage, you’ll pay the mortgage in monthly instalments. The amount due will be converted into euro at the foreign exchange (FX) rate when the instalment is due.

Foreign currency mortgages are usually used if the currency of the debt is stronger (and continues to be stronger for the period of the loan term) than the local currency of the country you are buying your property in.


Foreign currency mortgages usually mean you can benefit from lower interest rates. Over the course of the loan, this will add up significantly, saving you a considerable amount over time.

If you wish, or if it is beneficial to you, the currency in which the mortgage stands can even be changed mid-term. Individuals may sometimes opt to do this if doing so would allow them to benefit from a lower interest rate, as the value of certain currencies fluctuates over the loan term.

Any buyer whose income is in a "foreign" currency (i.e., not in the same domestic currency as the country where they are purchasing real estate) may wish to explore a foreign currency mortgage.

Foreign Currency Mortgages In Recent Years

Taking out a foreign currency mortgage became more of a challenge after the EU's Mortgage Credit Directive came into effect in 2016. The legislation effectively changed how lenders must monitor and caution foreign currency mortgage holders about significant fluctuations in currency exchange rates. Significant currency fluctuations now necessitate lenders having to offer borrowers the right to convert the mortgage to an alternative currency. For many lenders, this was simply too challenging to provide from an administrational perspective. As a result, many lenders stopped offering foreign currency loans, and they became harder to come by, despite continued demand from foreign property investors.

The Mortgage Credit Directive was predominantly designed to protect borrowers who were ill-equipped to afford significant fluctuations in foreign currency exchange rates associated with a foreign currency mortgage. However, most of the clients Enness works with understand and are used to dealing with foreign currencies and the advantages and drawbacks of borrowing in a foreign currency. As a result, foreign currency mortgages remain an option, especially for high-net-worth individuals and borrowers that can prove they have a stable financial position. If you can show lenders you understand the potential risks of this type of mortgage and can easily absorb possible fluctuations in exchange rates, there are still very competitive deals to be had.

Why Enness For Foreign Currency Mortgages?

A large portion of Enness’ client base are overseas investors. You may be buying in the UK as a foreigner or expat or purchasing overseas real estate anywhere that’s not in your country of residence, be that investment property, a holiday home, or simply adding real estate to your portfolio. Whatever your reason for seeking a foreign currency mortgage, Enness has extensive experience in sourcing and negotiating this relatively niche type of financing, whether or not you are a citizen or resident of the UK.

Given there are fewer creditors on the market than there once were, obtaining a foreign currency mortgage if you are operating alone can be a challenge. Some mainstream lenders advertise this type of finance, but many do not, preferring personal introductions through their network or from parties like Enness.

Illustratio 18 July.jpg

Contact Enness

Regardless of where you are thinking of investing in property, Enness can help you understand your options for foreign currency mortgages. If you would like to discuss a potential scenario, learn more about how foreign currency mortgages work and what they cost, get in touch. A broker will be in touch for an informal chat to answer any questions you have.

Schedule A Callback

High Net Worth Guide to UK Mortgages

The UK is home to one of the most liquid, competitive, and complicated mortgage markets in the world.

There are hundreds of mortgage providers who lend in the UK, from major international banks to niche building societies and alternative lenders. Each lender has their own specialisation and position in the market where they excel. They also have lending criteria, interest rates, processes and oddities which are specific to them.

The UK has a considerable number of lending channels. There are regulated mortgages, unregulated mortgages, buy-to-let finance, bridging finance, commercial mortgages and more. It’s easy to see why the lending market is so complicated. The UK’s finance options are plentiful.

There are huge pools of liquidity (some of it incredibly cheap) and you can enjoy flexible lending terms. If you are a foreign national, expat, a high-net-worth individual, are self-employed, have significant assets but relatively low taxable income or anything in between, the UK mortgage market will have an option for you.