MartinH

Has anyone tried to arrange a foreign currency loan when buying a house in Australia? The reason I ask is that in the €urozone interest rates and hence mortgage rates are considerably lower than in either the UK or Oz (current rate is around 4-4,5%) and therefore is a reasonably attractive proposition. Of course there is a currency risk but given that the €uro is only likely to weken in the long term - its a risk I might be prepared to take.

JAJ

You may find most Australian banks won't lend in a foreign currency unless:

1. The amount is large enough to be 'interesting' for them. Costs of processing a foreign currency loan are likely to be higher than an AUD loan; and

2. You are able to show that you can absorb any problems with the exchange rate. If part of your salary was denominated in EUR this might help.

There have been some bad experiences in the past with Australian borrowers going for loans in currencies like Swiss francs and Japanese yen, and getting stuffed when the exchange rate went the wrong way.

Jeremy