ozzydreamer

Just been watching 'Wanted down under', and love the houses!

We are convinced the safest thing to do is to rent out our house in the UK, and this will cover the mortgage here - if all goes to plan!

But now Im wondering if it makes sense to maybe rent for a year in Oz, but then if we can afford to buy a property in Oz. I have no idea about the laws there etc. so not sure if it is affordable etc. but we will bear it in my mind.

I was wondering if Mortgage rates in Oz are similar to those in the UK?
And are there any good Australian websites with mortgage calculators etc?

Nu-Shooz

Rates here are higher than in the UK. At the moment they are nearly 9%.

I borrowed $170,000 and pay $2000 a month with Bankwest. It has gone up and up since we got here nearly 2 years ago.

If you look on realestate or reiwa website you can calculate your earnings and borrowings.

Dorothy

Don't know what the UK mortgage rates are, but here in Australia we're looking at about 8-9% depending on how much deposit you have, credit history, lender, etc.

ozzydreamer

oh ok, thats quite a difference! Going to have to really start reading up and learning from scratch! Ive only just learnt all about the UK rules and laws etc. Think a trip to the libary is called for!

Grayling

Just remember that you will be liable for Australian income tax on the rental income from the UK house and that there are CGT implications if you own more than one house.

G

marcpiano

And you can look forward to yet another rate rise next month.

I feel sorry for anyone on variable rate mortgages...

Vim Fuego

We have ours split between fixed and variable, which hedges the bets a bit.

We also pay fortnightly which, as I've posted elsewhere, makes a fair amount of difference compared to paying monthly. If you can afford to do it (you pay more each year ... a extra month, effectively) then it's worth it in the long term.

Banks should offer fortnightly payment as default (most people I know get paid fortnightly so it's 'neater') but they are ain't going to give money away without a fight ...

Picking a random bank ... the calculators here can be useful:
http://www.suncorp.com.au/suncorp/pe...s/default.aspx

You can test the fortnightly thing using the 'Extra Repayments Calculator' link.

MartinH

First of all you should have a look at the following site:

www.ratecity.com.au

This is a site which not only compares cost by loan but also compares the loan "features" e.g. fees, account flexibility etc.

One of the best features is if the mortgage provider has an offset facility i.e. you have a current account but any cash in that account offsets your mortgage loan reducing the interest daily. Obviously these accounts require a psychological leap because you will always be looking at the mother of all overdrafts.

The other thing to watch is the "comparison rate" as this is the rate u need to use to compare lenders (as it factors in things like arrangement fees etc.)

I have just taken out a split fixed / variable with one direct at a rate of under 8% (7,74) which is about 1% below what the big banks offer and no fees.

It pays to do research as the market is very competitive.

CassienJames

Also - you only pay tax on your UK rental income if it is over and above your mortgage payments and maintenance etc, e.g tax on profit.
Your standard mortgage package/company will usually let you rent for 12 months without being on a buy to let package which can generally ease the pain!
Cassie

katsmajic

mmmm interesting! thank you x

Wendy

We pay ours fortnightly as well. It takes years off the loan

Ours is $806 per fortnight for a $228K loan.

Vim Fuego

We have a $260k loan and have increased our repayments whenever we can, it's amazing how a little extra can help over the long term ... the wonders of compound interest, etc.

asprilla

Yep, this is the key....making small regular prepayments can easily chop 10yrs off the term.

Paying fortnightly helps a little, but if I remember rightly it'll only reduce your total repayments on e.g. a $300k loan by a few hundred or a thousand at most, in comparison to paying monthly. The main advantages for you and me, are that you get a smoother cashflow, so its easier to plan. For the banks, the NPV is probably the same whether its fortnightly or monthly.

spottydog

I transfer all our monies to the mortgage on pay day. I always have a few hundred in the current account (to cover day to day living and bills) and when it gets low I just transfer a few hundred back from the mortgage (by using the internet all transfers between my mortgage and current account are free).

As much as possible goes on the credit card (Virgin so no annual fee) so I save another months interest before I have to pay it.

Rates are currently around 8% (variable rate including the 0.7% discount most banks offer).

Vim Fuego

Yup, you don't save any interest as such but the term of the loan is reduced and, as you say, the cashflow is more straightforward ... every two weeks money goes in, loan payment goes out, and we live off the rest.

We also have a redraw facility with no penalty fees so anything extra that we put in we can draw on should an emergency arise, this makes where to put any 'extra' cash we have a no-brainer.