The mortgage multidescries is a formula invented by the financial organizations to offer to the possible clients, an attractive alternative at the time of formalizing its hypothecating loans. The publicity and the references of this type of mortgages, are every time majors, had coverall, to the progressive increase of the indebtedness of the families, by the ascents of the types of interest and the indices of reference of the hypothecating loans. The increases of the price of the money, or type of interest and the IRPH, leads to them to important increases in the quotas of its mortgages whenever they are reviewed. In order to palliate these effects, they are tried to create attractive formulas that make diminish the amounts that are due to destine to the payment of the quotas and in this sense they appear the mortgages multidescries.
The objective of the mortgage multidescries is to lower to the interests of the loan, using like reference a currency that this depreciated with respect to the Euro and types of interest of the country of the currency is also lower than those of the Euro. In the mortgage it multidescries, is used the Libor that is an index published daily in London. Each country has its types of interest, for that reason to each of them a different Libor will correspond to him. To Libor it will be necessary to add the corresponding differential to him, like it happens with the Euribor. One of the best advantages of the mortgage multidescries is that if a currency is made excessively hard, or raises the price of the money in the country to which the currency belongs, we will be able to pass us to another currency that this depreciated and types of interest of the corresponding country are low. That reduction of the type of interest will imply a reduction in the quota. Therefore if we want to know whatever we would pay of quota using another currency that not outside the Euro, we would have to watch Libor corresponding to the country of the currency and to add the differential to him that applies the banking organization to him.
At the moment the Japanese Yen and the Swiss Franc are two currencies with low and undervalued types of interest with respect to the Euro, reason why they are two currencies with which we would substantially improve the conditions of the hypothecating loan. The operation in the mortgage multidescries could be the following one: if for example the bank grants 200,000 Euros to us for hypothecating loan, the day to notarize we would choose the currency that but agreed to us. If the chosen currency is the Japanese currency, the Japanese Yen, automatically, the debt of 200,000 Euros, would be transferred to its equivalent in Yens. Formulates it would be applied it of the compound interest using like type of interest Libor for the Yen, plus the differential that year the bank and we would know the quota to pay. The monthly payment would come in Yens and it would transfer it to the bank to Euros, reason why every month we would pay a different amount, following how it is the change of the Yen to the Euro then. According to the signed conditions, we will be able to change to another currency, for example quarterly, if the types of interest of the country of the used currency have raised considerably or if it has become hard with respect to the Euro.
The mortgage multidescries, has interesting advantages, but also it entails some disadvantages and risks. We must be continuously pending of economic data, like the types of interest of the different countries, the evolution of different currencies, its revaluation or depreciation, etc. We must of these customary ones handle financial data and have future vision. If for example we have a mortgage of 200,000 Euros and the currency that we have chosen raises a 20% against the Euro, now our debt would be of 240,000 Euros, but, the one is the Euro that raises a 20% with respect to the currency that we have our mortgage, then our mortgage will be of 160,000 Euros.
Also we must of knowledge that the commissions that are received in the mortgage multidescries are majors, and also is greater the differential than it is added to the reference index, in this case, Libor corresponding to the country of the currency, but even so, at the moment these majors expenses are well places setting, since the Euribor is much more high that the Libor of the Yen and the Swiss Franc for example. In addition in the mortgage multicurrency we must pay the commission corresponding to the currency change, since whenever the monthly payment arrives, our bank must happen of the chosen currency to the Euro. This commission usually is of a 0.2%, so for a letter of 1000 Euros we would pay 2 Euros more.
We are going to compare a mortgage of 200,000 Euros to 30 years reference to Euribor and Libor corresponding to the Japanese Yen. Like the differential that is applied to the Libor it is major that the one that is applied to the Euribor, we are going to suppose Euribor + 0.50% and Libor + 0.75%. The 4.683 Euribor at the moment is to and Libor for the Yen to 1,15.
Thus we have Euribor + 0.50 = 4.683 + 0.50 = 5,183. What supposes a monthly payment of: 1.096, 12 Euros.
On the other hand, Libor (Japanese Yen) + 0.75 = 1.15 + 0.75 = 1,90. What supposes a monthly payment of 729.28 Euros.
That is to say, a monthly saving of 366.84 Euros. We multiplied if it by the 360 quotas that suppose the 30 years, we have a total saving of 132,062 Euros. Evidently, this will vary much in 30 years, as we said the quota varies every month and theoretically we would change of currency whenever the conditions no longer were to us favorable.
The two used currencies more are the Japanese Yen and the Swiss Franc. The Libor of the Japanese Yen is lower and allows a greater saving, but it is more volatile than the Swiss Franc, since this he is more stable and it fluctuates less in the time. The Euro, the Japanese Yen, the Swiss Franc, the American Dollar, English Libra, the Canadian dollar, the New Zealander dollar, is currencies that can be used in the mortgages multidescries. It agrees to inquire and to consult at great length before sending itself to sign a mortgage multidescries. It is interesting but it is necessary to know all the details in detail. Perhaps the financial organization offers a customized tutelaje to us through what advises to us free, for example informing us into the moment at which it interests to change to him to another currency. Also it can be advisable at certain moments for contracting a change insurance that it protects to us of possible sudden ascents, knowing that it will lessen the possible saving secured through the mortgage multidescries. Really, it is an interesting option with many advantages, but also we must know its risks and knowledge that we must be always informed into economic data that allow us to make the suitable decisions.