The problem with Swiss Franc mortgages
Swiss Franc exchange rates
Originally, interest rates in most European countries were sky-high, and lenders sold mortgages as a low-interest alternative in Euros. Most currencies depreciated, whereas the Swiss Franc increased in value, making it a perfect backup plan for lenders.
The increased gap became a clear problem; as the Swiss Franc increased in value, so did the amount owed on mortgages, no matter the market value of the property.
Mis-selling and misrepresentation
Borrowers largely used Swiss Franc mortgages to purchase off-plan properties, which were, unfortunately, far from ready. The banks released money to allow developers to finish the properties, but then the Cypriot economy collapsed.
This left many borrowers with unfinished properties but large mortgages which had to be paid regardless. Many became mortgage prisoners, trying to sell the property at rock bottom prices for some return but still remain trapped with huge shortfalls.
Keeping up with payments
Although you were missold a mortgage, it is essential that you keep up with the payments. If you begin missing payments on your mortgage, you are at risk of legal action, even in your home country.
The bank will take several steps to recover its money, including issuing a Writ, repossessing the property, and instructing UK-based solicitors or debt collectors.
Although Cypriot banks are slow to act, you are at risk in your home country. In many cases, customers can be hounded by debt collectors, receive charges on their homes, and you can incur high legal fees on top of the debt.
Find the best solution with EU Property Solutions
We refer to Swiss Franc Mortgages as the ‘Anti-Christ’ of the property world as they can cause a catastrophic effect on people’s financial security.
At Eu Property Solutions we have a tried and tested approach to dealing with Swiss Franc mortgages which is coupled with our legal team to achieve the best outcome for our clients.
Take the first important step to financial freedom by calling our team on 0330 124 1230 or email is at [email protected] to arrange your free initial consultation.
This is by far the most common question we are asked. Unfortunately, there is no simple answer. Mixed currencies, a stagnant economy, difficult lenders and issues with title deeds all combine to make Swiss Franc issues particularly difficult to settle. Although you may have been stuck with this burden for decades, all is not lost, and there are solutions available.
A Swiss Franc mortgage is a loan issued in Swiss francs (CHF). These mortgages gained popularity in certain European countries due to their lower interest rates compared to loans in the local currency. However, as the value of the Swiss franc appreciated over time, borrowers faced increased mortgage repayments.
Interest-only Swiss franc mortgages, where you pay only the interest throughout the term and repay the capital at the end, and 100% mortgages, which require no deposit, are now extremely rare or unavailable.
