I am looking for information on what banks, or other financial institutions, allow borrowing of money in their home currencies for the purposes of purchasing property?

The type of information I am after includes details like:

  • What is the name of the product, and if available, a URL with the product description?
  • What currency is the loan in?
  • What is an indicative range of the interest rate for this loan?
  • What is the minimum and maximum loan percentage or amount?
    • e.g. minimum 200K, maximum 80% of the property's value
  • Are there any eligibility criteria to qualify?
    • e.g. residency requirements

From my research thus far, I have yet to come across any detailed information on this topic. Where might I look for information like this?

Background information:

Motivation: Interest rates are around 5% in Australia, and are significantly lower in many other parts of the world

Known Risks: While borrowing in a foreign currency might be a better deal as a result of foreign exchange rates, there is the risk that currency exchange fluctuations might result in being in a worse off position overall.

  • Please refer to the help center to learn about the kinds of questions that are on-topic and suitable for this site. – Chris W. Rea Mar 28 '14 at 1:56
  • @ChrisW.Rea could you please explain how this is not on topic? This page includes a category for "Spending Wisely" --> "The financial aspects of homebuying", which this question clearly falls under. I understand that this question may also fall under the category of "Requests for specific service provider recommendations", that is not allowed, however, that is being a little pedantic, as I think an answer to this question would be beneficial to the the community in this forum. – bguiz Mar 28 '14 at 2:39
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    @bguiz The community generally tries to avoid questions asking for recommendations of specific products or services because they tend to get out of date/stale quickly. The site is trying to use the Q&A format to create a reference that will stand the test of time. The question might be better accepted if you asked for where you could find the type of information you are looking for instead of specific banks/loan products. – JohnFx Mar 28 '14 at 3:00
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    What surety are you providing for the loan of the amount denominated in non-Australian currency for property purchased in Australia? How is the non-Australian bank's loan secured? Properties are generally bought subject to mortgages. Is your non-Australian bank willing to issue a mortgage on your Australian property? – Dilip Sarwate Mar 28 '14 at 3:43
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    @DilipSarwate The surety would be the property itself - a mortgage. I'm not sure, hence the question - what sort of institution would be willing to issue a foreign mortgage? – bguiz Mar 28 '14 at 4:30

The big risk for a bank in country X is that they would be unfamiliar with all the lending rules and regulations in country Y. What forms and disclosures are required, and all the national and local steps that would be required. A mistake could leave them exposed, or in violation of some obscure law.

Plus they wouldn't have the resources in country Y to verify the existence and the actual ownership of the property. The fear would be that it was a scam.

This would likely cause them to have to charge a higher interest rate and higher fees. Not to mention that the currency ratio will change over the decades.

The risks would be large.

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You cannot do this as per the reasons mentioned by others above, mainly foreign banks cannot hold mortgages over properties in other countries.

If this was possible to do, don't you think many others would be applying overseas for mortgages and loans. And even if it was possible the overseas bank would give you a comparative rate to compete with the rates already offered in Australia (to compensate with the extra risks).

If you cannot afford to purchase a property at record low rates of below 5% in Australia, then you may want to re-think your strategy.

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