Brisbane bound

We were lucky enough to sell our UK home in Jan but have left money there for obvious reasons. Is it mad to think of buying with a 25 year mortgage here (bearing in mind I am 45 and OH 55) and then when the conversion rate is better, get the money over and pay off the bulk of the mortgage?
Before the conversion rate got so bad, our plan was to use some of the UK money to buy here and get a smaller mortgage over 10 years.

I think it sounds reasonable but is it too much of a gamble?

harrip

I think it seems reasonable, albeit it would present an element of ongoing uncertainty in your life whilst you monitor exchange rates over what could be a long period of time. Could you live with the uncertainty and also not be tempted to dip into the savings?

The end equation though probably needs to take into your views of UK interest rates on the money V mortgage rate or Aus savings rates as well as the exchange rate movements.

k76

Unless you really know what you are doing with Forex I think the best way to transfer a decent sum is spreading it out in time. But watch the commision. If you transfer all the money today and the AUD tanks over the coming months you are going to kick yourself. Same if you wait and GBP just gets worse from here in. If you have a strong feeling it will go one way it could be worth the gamble to go all at once, but if not spreading over time will get you a decent average.

longreach

It depends on how much you have to transfer and what you think will happen to xrates in the future.

Lets assume you have £100,000. Thats about $200,000.

On a mortgage, that equates to $17,540 worth of interest a year at current interest rates. That would require the xrate to go up to at least 2.18 in the next year for you to remain equal. Over 2 years, it would need to go up to 2.35.

Do you think that is likely to happen?

Billabong

Make sure you consider the tax implications as well. If you bring in money after 6 months of residency I this Oz will tax you. I could be wrong here though

longreach

Yes, this maybe an issue in that you may have to pay CGT on any gain you have made.

I have heard however of at least one member gaining an ato ruling whereby he was granted excemption due to it being of a 'personal nature'.

I would suggest seeking tax advice / rulings.

Big Galah

We need a "can of worms" smiley...

worzel

A gamble is exactly what it is. How do you know the rate will improve and not get even worse? I have met people who came here when the rate was $2.99:$1

worzel

Another point to consider is that interest rates are about twice as high in Aus as the UK so you would earn a hell of a lot more here at the moment.

ray2gill

The rates aren't that much higher in Oz, depends where you have your money. Also the tax rate is higher in OZ than UK.