As borrowers struggle to raise mortgage finance during the credit crunch, companies have launched currency management products which they hope will make it easier for debtors to repay loans. Earlier this month, 3D Currency Management, a UK company, launched a secured debt management programme which takes positions in the foreign exchange market against a sterling-denominated loan. The idea behind the product is that if, or when, the value of a foreign currency falls against sterling, this cuts the outstanding balance of a borrower’s liability. However, if sterling rises against many currencies at the same time, as happened in 2007, the actual debt repayment costs can go up, as has happened with some foreign currency mortgage products. 3DCM offers a real-time forex trading capability to enable investors to benefit instantly from moves in currencies while reducing potential risks from a drop in sterling. “Trading performance to date shows that 3DCM has achieved a 3 per cent reduction in individuals’ debt since September 2007,” the firm said in its product launch statement. 3DCM is not, however, the only forex specialist that offers investors – typically high net worth individuals – a way to cut debt by playing in the currency markets. And recent performance suggests that swapping repayments into a different currency can be risky. ECU Group, a company that manages the forex risks of multi-currency mortgages, reports on its website that after its fees were deducted, investors lost more than 11 per cent in terms of higher debt repayment costs because of sterling's falls last year. Since the start of this year, investors have lost a further 6.5 per cent. ECU Group points out that sterling has suffered its worst performance since the early 1990s but adds that foreign currency mortgages should be seen as a long-term strategy rather than a quick fix to cut debt. Meanwhile, 3DCM is insists that foreign currency mortgages make sense despite some concerns about sterling’s current weakness. “We see a very significant demand for this product. In the current environment, where credit and borrowing are not as readily available to all, compared with perhaps nine months ago, the 3DCM product can provide increased efficiencies above and beyond conventional lending,” said from Neil Staines, chief operating officer at 3DCM. “Typically, a falling pound is not the ideal scenario for reducing the value of a sterling debt. However, we have reduced our clients' debt by around 3 per cent over the past seven months whilst the sterling index has fallen around 11.6 per cent. Sterling may be weak but there are other currencies that may be weaker over varying timescales,” he said.