Is it feasible to get a low rate US Mortgage to buy a UK property and if it is why do more people not do this? In general, why can't I borrow money from countries with low interest and save in countries with high interest rates.
Thanks
Will
This has been discussed several times in the past months. Google should locate them for you.
The main problem is the exchange risk - especially for those without an US$ income stream.
There are a few UK lenders which will use US rates.
Search for US libor mortgage. Skipton do one (according to google search)
In message , Tumbleweed writes
Accord mortgages do one as well, they are denominated in sterling but linked to US LIBOR and therefore remove the currency risk.
A quick look indicates it's for 5 years only before reverting to SVR. The tempting rate of 3.29% only lasts until October 2004, then jumps by 1.99% to
5.28%. There's an arrangement fee of 495 and early redemption penalties.In message , Doug Ramage writes
At home @ moment, but yesterday that 'jump' was to a payment rate of less than 4% for 5 years. Are we talking about the same deal?
Perhaps not. The one I was looking at was called "Issue 2 - 5 year Libor Tracker".
You're still tied in to US rates. If they rise you could be looking at a big increase. Over the last 10 years US rates were normally below UK rates but there has been periods when they were higher. Since the US LIBOR mortgages are typically 1.99% above the LIBOR rate then US interest rates would have to remain a lot lower than UK rates for it to be better than a good sterling mortgage.
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