Overseas mortgage

The mortgage on our home in the UK (now rented out)is just about to end and I was wondering whether we should take out an offshore mortgage or even a mortgage from HK on the property rather than jsut another UK mortgage. Does anyone know the benefits or otherwise, or know anyone who could advise us? Appreciated

Depends on what you want to do - with an unemcumbered property you have a few choices and opportunities.


Firstly pay it off - that is always seen as a benefit and a huge leverage. However, what you do need to do is use that equity to buy another loan on another property (or 2) in the UK (if you require tax benefits in the UK as you will be making a profit from your rental in the UK) or you can take a mortgage on the property to use in HK as a downpayment or part payment on a property.


Or you may be able to do both - depending on how much money you have and what you really want to do.


You need to decide - how long you are going to be OS - short term or long term....if long term you may want to invest in HK, if not take a property in the UK (or elsewhere).


That is just my experience - others may have other ideas. If you are young (under 40)- my advise is to buy as many properties as you can NOW - as once you are over 40 your 'earning' potential decreases as you age toward retirement at 65 - limits the length of mortgage you are offered- which increases the cost of repayments. (a lesson recently learned!) So for a lower cash flow when you are younger you will reap the rewards when you are older.

Thanks, good advice and appreciate the help. Any recommendations on lenders?

I have recently refinanced properties in Australia through the national Australia Bank - so see if there is a UK bank that will do similar things in HK. They usually will only mortgage up to 75 - 80% of the value.

Hi dimac4, very interested to hear what you thought of the nat bank for oz mortgages... particularly vs ANZ... we have just gained pre-approval with them. Anyting we should be aware of?

NAB gave us a great deal - they were the cheapest with regards to the fees that we were going to pay ($1000HKD) application fee (CAB were going to cost about $6,000 for application fee.) NAB were flexible to what we needed. We looked at ANZ but they didn't do what we wanted - they only took a bank guarantee (costing many $$$$$ every year) on our properties in Australia. NAB did what we asked for and at the moment we are happy with that.

Thanks for that. We are getting our first investment property and are a bit confused about duel currency loans, whether or not to take dual, or 100% HK or 100% AUS. We want to be able to draw on our equity as well. We would also be making repayments every three months as well rather than weekly, fornightly or monthly. Principal and Interest vs, interest only etc. You do so much reading but when it all starts to eventuate you get nervous I guess.

Any more advice for first timers please?

Thanks for that. We are getting our first investment property and are a bit confused about duel currency loans, whether or not to take dual, or 100% HK or 100% AUS. We want to be able to draw on our equity as well. We would also be making repayments every three months as well rather than weekly, fornightly or monthly. Principal and Interest vs, interest only etc. You do so much reading but when it all starts to eventuate you get nervous I guess.

Any more advice for first timers please?

With ANZ make sure you can change currencies depending on what is going on with the exchange rate - NAB allowed us 2 'free' swaps a year then it will cost $1000 per swap. Your loan should enable you to change currencies rather than be locked in. Is your property in HK or Australia? I would assume in Australia as ANZ don't lend for HK properties. Check out what NAB will do, and CAB - shop around before you sign anything with anyone. You can save many $$$$ and get what you want by knowing what the other banks offer - the banks want your business so if you know what is the going deals and negotiate with this knowledge you will be better off.


What is the purpose of your investment - long term or short term gain? We have a number of properties and have paid off all but one which has a token mortgage retained for taxation purposes. Our goal when we buy properties is very long term - we do not intend to sell any of them until we retire - even then we probably won't as the tenants will give a nice income over our twilight years.


Accountants will tell you to only go interest only and save the cash - however, we have found that by paying off the loans faster than the term we have far more equity in these properties than any cash we could have saved over the same time - and we are able to borrow full amounts on the full value of the properties - not just the unemcumbered bits. We have used our houses a few times to purchase new homes.


It also means that we can go home, live in one of the houses without having to pay any money to anyone and have others pay our way - while we sleep in.


Location Location location.....make sure where you are buying is good for renters - ie the rent is not going to be too high, (or too low) and yet your capital growth won't be stunted. Get yourself an excellent property management company and do not be afraid to change if they are not doing what you want them to do - demand what you want from them and don't let them boss you around. Keep your property in a condition so that if you needed to sell it in a week you could without spending much $$$ and time fixing it up after neglecting it - you will also get a higher class of tenant if your house is kept in a good condition.


House and land is always a better investment than apartments in Australia - with town houses and duplexes being a compromise.


Hope this helps - maybe I didn't answer your questions re the loans very well - do what you can , and do loads of research - and check out all the banks - we have also used St George in Australia to buy while we have lived here (They are one of the few banks who will lend in Australia to expats) - although it was a 100% Australian loan, our rental income was covering the mortgage in Australia - which ensured everything was even with regard to exchange rates. (and interest). If your loan is in HKD they will charge you HKD interest rates - if in Australian, Ozzie interest rates - so you need to be aware of what is going on with the exchange rate and the interest rate if you have the opportunity to switch. At the moment the HKD interest is much lower than the Australian Dollar interest rate = savings and greater opportunity to pay off more.