First sterling mortgage based on Swiss Franc interest rates launched

 

FIRST STERLING MORTGAGE BASED ON SWISS FRANC INTEREST RATES LAUNCHED
Article date: 27/09/2005 : 13:10:12

A new mortgage, based on three-month Swiss Franc Libor interest rates, has been developed by independent mortgage experts John Charcoal.

The Swiss mortgage, which has an opening pay rate of just 3.99 per cent, could be a better deal than mortgages that track UK interest rates and there is no currency risk as the mortgage has a Sterling foundation.

The mortgage will track the Swiss Franc Libor rate until the end of 2010 and will offer loans from £50,000 up to 80 per cent loan-to-value up to £1 million.

Ray Boulger, senior technical manager at John Charcol, said: "Obviously, as with any variable rate mortgage, there is interest rate risk but the main attraction of this mortgage is the lower interest rate compared to an ordinary tracker mortgage.

"Furthermore, because Swiss Franc interest rates have tended to be much more stable than sterling rates there is a good possibility that interest payments on this mortgage will be much more stable than a mortgage linked to UK rates."

He also said the mortgage would continue to offer good value compared with UK interest rates based mortgages, if the three-month Swiss Franc Libor rate stayed significantly lower the equivalent UK rate.
 
 
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