12 Pepper Street, Docklands, London, E14 9QY
Tel: 0207 519 4900
Fax: 020 7519 4910
clients@sophisticatedmortgages.com

Creating an asset out of a liability

In an age where investors are spending increasing amounts of time managing their investments, it is perhaps strange that the management of liabilities is an area that remains frequently overlooked.

With a Sophisticated Mortgage the cornerstone of our philosophy is that a pound is a pound whether it has a plus or minus sign in front of it and that it should be professionally and skillfully managed whether
it is an investment or a debt.

The overall objective of the multi-currency mortgage management programme is to reduce the size of your mortgage by borrowing in currencies which fall in value against sterling; and reduce the cost of servicing the debt by borrowing in currencies which have a lower interest rate than sterling.

The three main benefits of a managed multi-currency mortgage are:

• Debt Reduction - This is achieved by switching your mortgage between foreign currencies which weaken against sterling.
• Interest Rate Savings - This is achieved through borrowing in one or more low-interest rate currencies.
• Tax Efficiency - For private individuals borrowing against their main residence the benefits of the programme are currently tax efficient.

However with these potential benefits come risks, and foreign currency loans should not be considered by anyone who is unable to afford the financial implications of a permanent increase in their loan and the resulting higher sterling interest rate payments.

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