TD63

Really could do with a bit of honest advice, this is my situation, i have in savings £190.000 GBP and also rent a couple of properties out rougthly bringing an annual income of £22-24000. The house i own cant sell so i have money tied up in this property, approx £200.000. My mortgage on my current home is £237.000 so as i am on an offset mortgage i am paying the interest on £47000.00. I really need to sell my current home to enable to buy in OZ (But like most people have posted, nothing in the UK is selling so renting is the better option), i will be renting myself in OZ for at least 12-18 months. But just dont know what the best option is to do with our savings do we A- take the money and bank over in OZ and pay the mortgage out of the rental if we rent but this would be on the full £237000 or do we B- leave the savings and use the rental of our UK property to fund the OZ rental. I am hoping the income off the rents will help me to get settled, sorry to be longwinded but any advice would be welcome.

JAJ

Cash in the bank? That's a good start.

Do you have debt on these properties? Or do you own them outright?

No such thing as "can't sell." Your property will sell if you price it at what a willing buyer is prepared to pay, which is probably less than GBP200,000.

And why are you carrying a big mortgage when you have cash sitting on deposit?

Bermudashorts

You are not going to need £190k in Australia if you are planning to rent, assuming you plan to work. There is no right or wrong answer to this, it is up to you, but why not just bring over what you need in small lump sums. And hope for a better exchange rate in the meantime.

JAJ - just an FYI. I have a very similar financial situation to the OP, a mortgage and around hte same amount in savings. I pay 0.5% interest on the mortgage and earn about 5% interest on the savings. Makes sense to me and I like having some liquid funds.

TD63

as above

I must point out that i am in my late 40s so i need to ayre on the side of caution , this is why i am hoping for some helpfull replies.

JAJ

It's a good idea to have liquid funds (6 to 12 months earnings is a good target for those with the means to achieve it, although if you have no mortgage you don't need as much).

5% interest on savings? What kind of risk are you taking to get that return when base rates are less than 1%?

I'd be very cautious about holding savings and debt at the same time. If the bank goes bankrupt then you may not get anything more than the GBP50k compensation limit and your debt will be unaffected. In this financial environment, it's much safer to use savings to eliminate debt, keeping in liquid funds only what you need for emergencies.

JAJ

You won't get helpful replies unless you supply all the facts ... you now say you have debt on your rental properties. How much debt and how much are the properties worth (ie, what you can sell them for right now)?

Bermudashorts

I don't do risk Fixed term savings account with a high street financial institution.

I am honestly not worried about HSBC going bankrupt. However now that we are over here and working and not planning to buy property just yet, I probably will pay some of the mortgage down with the funds not in the fixed term account.

JAJ

HSBC aren't paying 5% now. More like 2.5-3%, at least according to their website. The gap between savings rates and the base rate shows the mess that the financial system is still in. And banks are obviously losing a lot of money on mortgages at 1% or so. Sooner or later that will cause problems.

I would say HSBC is as safe as anywhere but the point remains valid - holding a large debt with one bank and savings with another represents a financial risk.

TD63

Yes i own the rental properties outright and i was hoping that they would return 22-24000 GBP per year, before tax, if i sell them i would have CGT,I have heard that after 5years overseas the CGT doesn apply ?.
The 190000GBP, that is in savings is used as an offset on my mortgage, this is were i need the best soloution, do i take the savings to OZ and put in an account wich pays a decent rate and rent my current home out and whatever i recieve in rental income, try to reduce my mortgae which stands at 237000 GBP. The only downside to me is that i cant buy in OZ untill i sell my current home, been on the market for over a year, reduced from 495 to 450000, with still little interest, on the rental side i would expect to recieve around 1450GBP Per month, so could be beneficial in the long term.