buy$ now or wait?
 

We are going to OZ in two years time but have a lump sum now- any ideas on whether we should pay off our mortgage here or buy dollars now ,as the rate is pretty good and then invest the money there?

Re: buy$ now or wait?
 

laurash wrote:

    >We are going to OZ in two years time but have a lump sum now- any ideas on whether
    >we should pay off our mortgage here or buy dollars now ,as the rate is pretty good
    >and then invest the money there?

Personally, I would not buy the Aus dollars now. Who knows what'll happen in the next
2 years. Leave the long term currency speculating to the experts.

As for the mortgage, ask your lender for a redemption statement. Then do the sums.
Work out what interest you'll be paying for the next 2 years and what you'll stil owe
at the end. Next work out what interest your cash can generate over the next two
years. Remember that savings interest will be taxed.

Unless you have early redemption penalties to pay on the mortgage, paying it off
ought to be the best route.

Re: buy$ now or wait?
 

Unless you are definite about going to Australia, and have received permission to
migrate, you should be very cautious about buying Australian dollars that you may
have to convert back into sterling in a few years time. You might gain on the
transaction, but could easily lose too.

An issue about paying off a mortgage early is that if you contemplate letting out
your property rather than selling it, you risk ending up in a tax-inefficient
situation (under both UK and Australian tax laws, it's often more efficient to
have debt on a rental property and a debt-free property you live in than the other
way around).

I would suggest you get some good professional advice tailored to your own
circumstances. Unfortunately, a newsgroup can't really provide that kind of advice.

Jeremy

    >On Mon, 13 May 2002 10:12:50 GMT, rob <[email protected]> wrote:

    >laurash wrote:
    >
    >>We are going to OZ in two years time but have a lump sum now- any ideas on whether
    >>we should pay off our mortgage here or buy dollars now ,as the rate is pretty good
    >>and then invest the money there?
    >
    >Personally, I would not buy the Aus dollars now. Who knows what'll happen in the
    >next 2 years. Leave the long term currency speculating to the experts.
    >
    >As for the mortgage, ask your lender for a redemption statement. Then do the sums.
    >Work out what interest you'll be paying for the next 2 years and what you'll stil
    >owe at the end. Next work out what interest your cash can generate over the next two
    >years. Remember that savings interest will be taxed.
    >
    >Unless you have early redemption penalties to pay on the mortgage, paying it off
    >ought to be the best route.
    >