Look abroad for cheaper mortgages

Update: read Should you buy a yen mortgage? for more expert advice on foreign currency mortgages.

Interest rates may seem pretty low at 4%, but this is still more than some canny investors are paying for their mortgage, says David Budworth in The Sunday Times. Take Gervais Williams, a fund manager at Gartmore, who has capitalised on Japan's near-zero interest rates and taken out a mortgage in yen on his London property. Should you do the same? If you are happy with the risk of exposure to foreign-currency fluctuations, yes.

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Interest rates in both the eurozone and the US are expected to remain at their respective 2% and 1% for this year (the European Central Bank may even cut rates), but bear in mind that, if the currency you choose strengthens against the pound, the value of your debt and repayments would rise.

If you don't want that risk, you may be more interested in broker Charcol's Federal Reserve tracker mortgage, which allows you to follow short-term US rates with a loan in sterling (0800-718191). This product is currently oversubscribed, but there are hopes that it will be reintroduced.

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