Hi All,
About to start living overseas (China) and wondering if any options exist for re-financing my property offshore. I am concerned that when I move, my income will be based in a foreign currency (RMB) however my mortgage payments will still be in AUD and I will be exposed to negative exchange rate movements. Is there some way I can hedge against this? Though don't really want to be spending all my time looking at currency markets to do this.Any thoughts and advice on what I can do? Has any one else had the same problem and overcome this?
Cheers,
Tom
Hi Tom,
I am living in China at the moment and faced the same issue. Scratched around up here for a while looking at different options. I ended up re-financing my existing property in Melbourne and buying a new place with one loan from here using ANZ in Beijing. Basically I now structure the loan where part is in Aussie Dollars (where the interest payments match my rental income) and part in Hong Kong dollars (which is matched to my RMB income). This means I am effectively hedged as currency movements don't change my net position. Also got a cheaper rate for the Hong Kong Dollar part of the loan at 5.5% so I save a bit as well.
Another good thing is that I can deal with the bank from up here for everything and can make payments directly to the local branch or from my China account – don't need to deal with Australia.
Hope that helps.
St George offer a Foreign Currency loan facility with the interest rate pegged against the Interbank rate for the country in the currency is charged i.e In HK the rate is set against the HIBOR currently around 5.75% depending on the loan amount with repayments being made in HK dollars.
Richard Taylor | Australia's leading private lender
You must be logged in to reply to this topic. If you don't have an account, you can register here.
