SELECTING the currency for a loan is one of the most important decisions a borrower can make, say Hong Kong mortgage lenders. Francois Barbe, general manager of private banking at Banque Nationale de Paris, said that if a loan were in the wrong currency it could exceed the property's value. Three factors should be taken into account when choosing a currency, but which factor the borrower decided was the most important might depend on circumstances, he said. First, in many circumstances, the borrower may decide the safest option is to have the loan in the same currency as his or her income. Alternatively, a mortgagor may decide the exchange rates is more important. For example, Mr Barbe said, a borrower might consider it ''a little bit risky to take loans in United States dollars-based currencies for an asset in Europe'', during the present US dollar crisis. A loan taken out in a European-based currency might be more prudent. Interest rates is the third factor that a buyer may consider. Mr Barbe said Europe's interest rates were now lower than those in Hong Kong and, therefore, if a borrower was looking to buy a property in France, for example, then it might be best to take out a loan in French francs. Barry Lea, regional director of Hill Samuel, said there was ''no definitive answer'' on choosing a currency. However, he said it could be more appropriate for a buyer to match his or her income and other sources of revenue against a loan, rather than the value of the property. ''Borrowers should consider prevailing interest rates and the relative strengths and weaknesses of the currencies,'' he said. ''You should not borrow in a currency which you think is going to weaken'', because it could make repayments more costly, he said. For example, at press time a GBP100,000 home in Britain was going to cost $1.2 million because the Hong Kong dollar was valued at about $12 to GBP1. In the time the pound has appreciated - from GBP1 to $11.50 - the property has become $50,000 more expensive. Patty Lam, banking services manager at the Royal Bank of Canada, advised borrowers to make repayments in the same currency as their income. Hong Kong people buying a property in Canada with the intention to migrate ought to take out loans in Canadian dollars, she said. Canada's interest rates were lower than those in Hong Kong, which was an extra incentive to take out loans in Canadian dollars because the mortgage interest payments would be cheaper, she said. However, if the same buyers planned to reside in Hong Kong, they should take out a mortgage in Hong Kong dollars, she said. Johnny Lo, head of personal banking at the Westpac Bank of Australia, recommended people who wished to buy Australian property to choose Hong Kong dollars for their loans ''to help hedge against their future income''. Tom Hayes, banking manager at the Royal Bank of Scotland, said: ''While reductions in interest costs may be achieved by borrowing in certain foreign currencies, a mismatch between the asset financed and borrowing currency does introduce an element of exchange risk. This aspect should be considered carefully by the customer.''