The service, known as sophisticatedmortgages.com, is being distributed by Premier Mortgage Service and aims to reduce the size and cost of servicing mortgages by making the most of international tax laws as well as fluctuating foreign exchange and interest rates.
The mortgage is refinanced in a multi-currency mortgage where it is actively managed among currencies that are weakening against the pound.
Products are only available over 250,000, and are all 100% prime. The mortgages are managed with a stop-loss policy so if the loan loses a maximum of 15% on the markets then it is frozen by the mortgage manager, The ECU Group. The company charges 395 for its managing services.
Paul Welch, managing director of sophisticatedmortgages.com, says: “This service is for City brokers in the know who want to have a mortgage in a foreign currency. It’s a niche market, and our average loan is 1m, so it is a profitable one.
“For the right people who are prepared for the risks this is a great service. And it will grow with the right management. Loans such as this could help more people than high-roller City brokers. Many more people are buying and selling abroad, with buy-to-let portfolios.”
Nick Bull, head of marketing at MoneyCorp, says: “This is aimed at high-roller brokers for a reason – risk.
“Moving a mortgage between currencies with lower interest rates is fine provided you accept you need to service it. Each month you will incur costs of transferring one currency to another to make payments. Will the savings offset these? Doubtful, unless it’s a big enough mortgage.
“If interest rates rise across the board, you could end up with a higher rate than was previously available.”