The second major use - and easily the biggest - that UK nationals have for foreign currency mortgages is for buying property abroad.

Buying property abroad is normally easier if it can be done without a mortgage. Most mortgage lenders will refuse to lend on a property that is going to be let out commercially, because of the risks involved. Letting law on the continent is biased towards the rights of the tenant and it can be a long, drawn out and expensive legal process to evict of them. They may well turn a blind eye if your property is to be occupied by friends and family, indeed some encourage it, but you will struggle to get a loan for a buy to let property abroad.

Assuming that you are not in a position to buy the property outright, you must decide whether to arrange your finances from the UK or use a local lender in the country where you are purchasing a home.

The decision is often made easy by the difficulty that many Brits face in getting a mortgage through a local bank. Outside of the major towns and cities, very few of them are really set up to deal with the needs of foreigners. Whilst they may have the massive advantage of detailed knowledge of the local market and all of the relevant legislation, the language barrier can be an insurmountable stumbling block even for those who are proficient in the local tongue. The complicated paperwork and bureaucratic process take specialist linguistic knowledge which would really require a bi-lingual level of knowledge in order to properly understand and the bank may be unwilling or unable to provide this service for you.

British lenders arranging mortgages abroad are a little more conservative than if you were buying here, but often still more flexible than local lenders. A number of them also have dedicated departments that are experienced in overcoming the difficulties that British nationals face when buying property abroad.

In terms of product technicalities, the maximum LTV is generally from 65 percent to 80 percent, while the term is commonly a little shorter than in this country, sometimes as brief as 15 years. The interest rate that you pay is normally a fixed percentage above what is known the LIBOR rate (the London Inter-Bank Offered Rate). Most lenders that offer foreign currency mortgages will charge you between one and two percent above the LIBOR rate.