Five interest rate rises in a year have stretched borrowers to the limit and everyone is looking for a solution. What about a foreign currency mortgage?

These mortgages are aimed at high earners who are happy to take a risk with exchange rate fluctuations. Investec Private Bank, for example, only lends at least £500,000, but others do start from £150,000.

What overseas mortgages do is let borrowers take advantage of low interest rates abroad. For example a 6% interest rate in the UK on a loan of £250,000 would mean monthly repayments of £1,458. In Euros, with an interest rate of 3.92%, repayments would come down to £1,077. With a mortgage in Japanese Yen and an interest rate of only 0.76% repayments would plummet to only £238 a month. This is possible because the interbank rate at which Japanese banks borrow money is less than 1%, whereas the London Interbank Offered Rate (LIBOR) is 6%.

Investec’s mortgage offerings can be secured against property, investments or offshore deposits.

Rates can look very attractive, but come with a warning from experts to look beyond the low rates, taking into account currency volatility and associated mortgage arrangement fees. Fees, including legal and valuations, stamp duty and land registry fees can add up to more than £12,000 on a £250,000 mortgage in foreign currency, but these are not too far removed from a sterling mortgage.

Volatility is the real risk, and experts advise that people taking such a loan should be able to take a 20% loss, but in reality there is no limit. Exhange rates can be critical and specialists MoneyCorp, HiFX, World First offer more competitive rates than those found on the high street.

High risk can be reduced by taking out a multi-currency mortgage, which give the freedom to switch between currencies when necessary.