Austrian homeowners hit by Swiss franc mortgages

Vienna

THE surging Swiss franc has dealt a double blow to homeowners in Austria, home of the trend for borrowing in the Swiss currency that has devastated mortgage holders across eastern Europe.

In the early 1990s, people living in the west of the country who crossed into Switzerland to work were lured by the ultra-low interest rates offered in the safe-haven currency.

The idea then spread, crossing a fundamental red line that was barely perceptible at the time: the new borrowers were not earning Swiss francs but euros.

Foreign-currency loans now account for nearly a fifth of household debt in Austria, even though regulators effectively ban…