Hi all!
Travelling overseas at the moment, I have noticed that in certain European nations (UK included) the interest rates charged are lower that current Aussie levels (recent increase yes?).
Question: If Aussie interest rates continue to rise, thus dampening the domestic property market and in turn providing more opportunities for purchasing “cheaper” properties, what are the obstacles / legal hurdles to borrowing money from foreign banks that have lower interest rates? If you have to be a resident in the country from which you are borrowing are there “ways” in which this can be achieved?
There must be a way to do this and take advantage of foreign rates so if any one knows of a way….Help![?]
Institutional lenders generally require some form of security in the country the loan originates.
Furthermore, it is likely you will need to be a resident, have an excellent credit history, and a solid track record with the lender.
As an individual seeking finance your chances will be limited at most with the above qualifications.
If you are an established commercial entity with an offshore subsidiary [w/ minimum two year financial history] you may find a lender willing to discuss offshore finance if it does not conflict with government and/or regulatory restrictions.
— Michael
Fluctuating currency rates add an extra degree of risk to overseas money.
Also, as mentioned, security for the loan will be a difficult issue.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I have actually written to some lenders in The Netherlands a few months ago (I was born there). (No I don’t mean I was born there a few months ago[:0)])
I was interested because you could fix a loan for 5 years at 4% interest! Variable at 3.89%. Very attractive, made me feel GREEDY[}
]. Not sure if rates have gone up since then.But all I got was a few big NOs, which I expected but still wanted to try.
It’s right what Simon said, security is a big issue.Thought about buying an appartment in Amsterdam, and have been in contact with some RE, but it would be very low yield. [xx(]
Also you don’t have as much control over your IPs as you have here.
Regards, CeliviaI looked into this a while ago but to purchase in South Africa where interest rates were around 14%, by taking out a line of credit against a property over here i could then use the money for a purchase over there.
I never got in contact with the banks in SA.
I was basically looking at what you are thinking but in reverse, by using our intrest rate here to borrow the money to use over in SA where the returns were much higher
If you have enough of a deposit that the property will be cf+ then the banks should look in your favour.
Different countries have different laws on overseas investors, so you would have to look right into this as you might have to buy “new property”
Chris
I’ve looked into borrowing from Japan. It can be done if your are working there and earning Yen. LVRs are around 70%, and there can be margin calls if exchange rates move suddenly. Also if you stop working and leave the country, you will have to convert the loan to AUD. I looked at NAB, but other Aussie banks should offer similar products. rates are about 2%!
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
]. Not sure if rates have gone up since then.
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