The European Commission’s Mortgage Credit Directive places requirements to ensure that lenders put in place additional consumer safeguards where loans are in a foreign currency, to protect the customer against exchange rate risk.
From a lender’s perspective, these include the relative difficulty in understanding credit risk in unfamiliar markets and the complexity in enforcing loans under foreign legal systems. For consumers, the scale and nature of a mortgage commitment drives a preference for dealing with well established, or local, brands.
A spokesperson for Nationwide said:
"With effect from Wednesday 8th April 2015, income paid in a foreign currency will no longer be accepted for new mortgage lending. For existing Nationwide customers moving home, where no new lending is required, foreign currency income may still be considered. There is also no change to the treatment of term variations or changes to repayment type but any foreign currency income must be converted to Sterling by the customer before use."
