From March 2016, thousands of people who receive all or part of their salary in a different currency could find that they are unable to get a mortgage.
The EU Mortgage Credit Directive has new rules for lenders who currently offer mortgages in foreign currency, which may lead to them withdrawing mortgage products. In fact, some lenders have already stopped offering foreign currency mortgages, including Skipton Building Society and the Halifax.
Around 200,000 people are employed by international organisations, including Members of European Parliament, oil company workers and those who live in Northern Ireland but work in Ireland and are paid in Euros. Foreign currency mortgages are loans that are in a different currency to the country in which the borrower lives, and a different currency to the one in which they are paid. The new rules mean that a fluctuation of the exchange rate between the different currencies, of 20% or greater, could result in the borrower being offered the chance to swap the currency to the one in their home country.
Experts fear that some lenders will stop offering these mortgages so that they don’t have to offer that option, with some already removing the product. Although some lenders, including Santander and https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpget Harborough Building Society, have pledged to continue offering the foreign currency mortgages, they will be limited to Euros and other main forms of currency.
A mortgage adviser who has taken a CeMAP exam will have an understanding of these mortgages and can advise whether they are suitable for you, or an alternative is available.
