Foreign currency mortgages: Long-term debt solution

Investors in the UK could find that taking out a foreign currency mortgage will clear their debt in the long term, it has emerged.

According to David Alexander, chief executive at Alexander Associates Group, the best option for those hoping to rely on the strengthening sterling to reduce their debt is a multi-currency mortgage.

“You would hope over a period of 25 years that you would clear your whole mortgage if you’re managing it via a multi-currency mortgage… You would hope that on an annual basis you would average five per cent reduction in your debt,” he said.

He added that those going into a multi-currency mortgage must understand the fact that it is always a long term investment, “just as a mortgage is a long-term debt”.

Reuters reported the pound reaching a four and a half year low against the euro this week, which is also currently enjoying an all-time high against the US dollar.

Tags: Financial services, alexander associates, finance, David Alexander, fact, long term investment, uk, high

Youngsters buying to let

The buy-to-let (BTL) market in the UK is beginning to be dominated by people aged between 26 and 35 years.

It has traditionally been a market for older people but new figures from Mortgage Trust show that the youngsters are catching up.

Around 26 per cent of new investors who own one property are aged between 26 and 35, while the same age group also makes up 16 per cent of BTL investors with up to three properties.

This rise in numbers appears to be a fairly recent phenomenon, with the number of 26 to 35-year olds with up to three BTL properties rising from 14 per cent in the last six months alone.

“Traditionally buy-to-let has been perceived as something for the more mature investor,” commented John Heron, managing director of Mortgage Trust.

“However, recently we have been witnessing an increase in the number of younger professionals choosing to make a considered and long term investment in property.

“We are seeing a new generation of young people who are preparing for the future by making long term financial plans. New landlords are looking at an investment that will see them safe for the long term – possibly even into retirement,” he added.

As many younger people struggle to put money into a pension scheme, investing in property and then renting it out is a great way to ensure financial security for the future.

Tags: Business Finance, new figures, heron, market, investment