Foreign currency mortgage

A foreign currency mortgage is a type of home loan where you borrow money from a bank in a different country and pay it back in that country's currency. This might sound complicated but it's actually quite simple. Here's an example:

Suppose you want to buy a house in the United States and you don't have enough money to pay for it all in US dollars. You could get a foreign currency mortgage from a bank in Japan. This means you would borrow money from the Japanese bank in Japanese Yen and use that money to buy the house. You would then make payments to the Japanese bank in Japanese Yen to pay back the loan. The exchange rate between the US and Japanese currencies would change all the time, so the amount you would need to pay each month could change too.