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Foreign currency demoninated loan

Foreign currency demoninated loan

Old Oct 1st 2006, 10:23 am
  #1  
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Default Foreign currency demoninated loan

I went to a talk with regards to investment in Australian properties. The speaker mentioned about opting for foreign currency denominated loan in order to reduce interest payment when purchasing properties in Australia.

e.g. The Interest rate on the Yen is approx 2.25% while the AUD is approx 7%. Therefore, the borrower is 'technically' better-off if he/she opted for a Yen denominated loan from an Australian bank.

Guys, what's your opinion on this????

Dave ..
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Old Oct 1st 2006, 10:27 am
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Default Re: Foreign currency demoninated loan

Originally Posted by dave_wong
I went to a talk with regards to investment in Australian properties. The speaker mentioned about opting for foreign currency denominated loan in order to reduce interest payment when purchasing properties in Australia.

e.g. The Interest rate on the Yen is approx 2.25% while the AUD is approx 7%. Therefore, the borrower is 'technically' better-off if he/she opted for a Yen denominated loan from an Australian bank.

Guys, what's your opinion on this????

Dave ..
Stay the F###K away from it mate. Sounds good but you need to be careful on the currency fluctuations and in that regard the risk is not worth it unless it is your profession to watch the AUD/YEN or you have income derived in Japan that can support the repayments.
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Old Oct 1st 2006, 11:42 am
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Default Re: Foreign currency demoninated loan

Originally Posted by dave_wong
I went to a talk with regards to investment in Australian properties. The speaker mentioned about opting for foreign currency denominated loan in order to reduce interest payment when purchasing properties in Australia.

e.g. The Interest rate on the Yen is approx 2.25% while the AUD is approx 7%. Therefore, the borrower is 'technically' better-off if he/she opted for a Yen denominated loan from an Australian bank.

Guys, what's your opinion on this????

Dave ..
As far as I am aware, these are not available from Australian banks. I recently enquired about one for a mortgage on a property I am building, but the financial adviser said that he was not aware of any such products. Just now would be the ideal time to do this with the Oz dollar being so weak against the pound, yen and Euro, but as the other poster said, these can be extremely risky.

If you manage to find a Japanese bank that will give you a loan on an Australian property, please let me know.
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Old Oct 1st 2006, 3:26 pm
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Default Re: Foreign currency demoninated loan

Thanks guys for the feedback.

I have not set foot in Australia at this point in time. However, I am planning to make the move sometime next year. FYI, the talk was organised by a local rep office of PRD (Property Research Development) Australia. The speaker has approx 100 properties in his portfolio and he manages some of these properties via loans derived from foreign denominated currency.
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Old Oct 1st 2006, 3:50 pm
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Default Re: Foreign currency demoninated loan

Originally Posted by dave_wong
Thanks guys for the feedback.

I have not set foot in Australia at this point in time. However, I am planning to make the move sometime next year. FYI, the talk was organised by a local rep office of PRD (Property Research Development) Australia. The speaker has approx 100 properties in his portfolio and he manages some of these properties via loans derived from foreign denominated currency.
I'd be interested in learning a bit more about this topic, as I have opportunities to buy property elsewhere, and it would be nice to know what the options are...

S
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