russell

hi has anyone remortgaged a house in uk and used the money to buy in oz,
reason being the interest rate is cheaper in the uk.
also if i sell the house here and move to oz and for any reason we cant settle there the cost to buy the same property would cost us £20,000 in stamp duty and selling fees

im not being negative just trying to cover all options as a lot of people seem to lose a lot of money if they come back to the uk. anybody done it before

Techno Freak

Hi, we have just remortgaged our house for the same reason - cheaper to borrow it here.

We swapped our mortgage to a buy-to-let mortgage and took some of the equity out.

We owed £80,000 on the old mortgage, and the house was valued at £190,000 so we borrowed £120,000 on the new mortgage. That kept us with 65% loan to value ratio which makes it easier to get a better mortgage deal.

That meant £80k to pay off the existing mortgage and £40k in our pocket.

The expected rental income on the house more than covers the interest payments on £120k, so the plan is to leave £5k here to cover shortfalls in rent and repairs etc and take the £35k to Oz as a deposit on a house over there if we end up buying one.

That's the grand plan anyway, just need to find a tenant for our house now.

If you are looking for BTL mortgage, Woolwich is superb at the moment. I spent ages researching all the current deals. The one we went for is a bank of England base rate tracker, tracked at 0.49% base rate for the entire term of the mortgage, ( currently 5.99% ), £250 application fee but free legals etc. Tie in is 3 years, but they do the same 0.49% tracker with no tie in but a 1% application fee, ( which would have been £1200 in our case ).

Hope this helps.

rockpeblar

Aren't you hit my Oz tax on the increase in value each year of your UK property?
For example if the UK house goes up in value by £20k are you not liable for tax on £20k in Oz?

canifixit

No.
You would only be liable for tax on any gain when you sold the house.

JAJ

Differences in interest rates reflect anticipated exchange rate movements.

Make sure you control your foreign currency exposure otherwise you could lose a shed-load of money, as others have done this way.