Posted by
Kadoorie
16 yrs ago
I will be moving to Hong Kong from Australia shortly and would like to take out a $HK mortgage over my Australian home. I have rung 2 banks in Hong Kong and they don't offer loans on foreign properties. Does any one know of a bank which will accommodate me.
Please support our advertisers:
why do you want to take out a HK$ mortgage if your property is in Australia?
Please support our advertisers:
Oops - sorry. Tried to delete but can't see how.
Please support our advertisers:
The main reason is to lock in the favourable exchange rate between the HK dollar and Aussie dollar. If I borrow say HK$3,000,000 I can convert that to approx A$600,000 and stick it in the bank in Oz. I will then pay the principal and interest back from my HKD salary over say, 5 years, so it doesn't matter if the Ozzie dollar moves up or down, I've already changed 5 years worth of $HK salary at today's exchange rate. Not to mention that the interest the money will earn in a bank in Oz will exceed the interest I have to pay on the HK dollar mortgage.
Please support our advertisers:
CF
16 yrs ago
We have ours with ANZ - it certainly is a favourable time to do it now. We are pleased that we have done it but I have to say the customer service from ANZ has at times been questionable.....I am sure that depends on who your relationship manager is. You can search ANZ hong kong to get the numbers. We have tried to extend one of our loans with them recently, and they are toosh*t scared to loan money at the moment....made it really difficult - despite the fact that we paid off one mortgage with these guys already (within 10 months!) The currency switching loan is great for us though, and interest rate is really low. Enjoy it!
Please support our advertisers:
Thanks very much for the replies. Looks like I rang the wrong banks.
Please support our advertisers:
I think you need to examine your logic carefully first. Most of it is fine, but there are things you need to consider.
I would elaborate, I just havent got time to get into a discussion, you should talk to someone properly, its a simple carry trade, lots of people big and small do it, but there is slap your own forehead material in your logic (and I dont mean that condescendingly, everyone has slapped their own forehead at some point in their lives).
I think you should talk it over with someone first, and when your logic encompasses all the risks, which you say don't exist but really do, and you decide thats still what you want to do in spite of the risk, fair enough.
Please support our advertisers:
DB - thanks for your concern, and I don't mean that sarcastically. My explanation was in response to someone asking why I wanted a HK dollar mortgage when my property was in Australia. My answer was intentionally simple, and not intended to cover all the pros and cons. I'm not sure why you say, " ... when your logic encompasses all the risks, which you say don't exist but really do...", because nowhere did I say or imply that there was no risk involved. I'm not an expert and I will certainly take your advice and talk to someone who is before I commit to anything.
Please support our advertisers:
Mate
sorry i haven't really got time to elaborate, sounds like a cop out, I know, but what is inevitable if I do is a discussion, and knowing what I am like with message boards, it will take up more time than I have or should devote.
Basically, you should do what you think is right (you don't need me to tell you that much), my only advice is talk it over properly with someone who understands all the risks of the trade, and once you are satisfied that you are aware of them all and are willing to bear them, assuming you have a person who you trust and beleive can give you that kind of advice, then whatever you do is fair game man. If you have already done that, great.
good luck with it all
Please support our advertisers:
Thanks for the advice. I will proceed with caution. Just trying to gather as much info as possible at this stage. I previously worked in Hong Kong for a number of years and watched the $A go up in value, reducing the amount I was able to repatriate each month until it wasn't worth staying. Now that I'm coming back with the $A relatively low again I want to guard against a repeat of what happened last time.
Please support our advertisers:
I can help you
contact me
Please support our advertisers:
sorry forgot my email
scroozz@gmail.com
Please support our advertisers:
Kadoorie said:
"I'm not an expert"
That is a very worrying comment from somebody who is just about to enter a leveraged very high volatility negative correlation trade! Win some proper advice and run all sort of scenario analysis. You may win or you may lose, but you better understand why, if and when things start to move! I am saying this with the best intentions in mind.
Please support our advertisers:
onemorething, admitting I am not an expert is an indication that I realise that I don't know it all. I think it would be a more "worrying comment" if I had claimed to be an expert. I'm very pleased that some people such as yourself have taken the time to warn me about the possible risks, and obviously there is more to this than I thought. I am still educating myself and have started getting some feedback from the banks. At this stage I haven't committed to anything.
Please support our advertisers:
I don't think you have to worry about anything, other than finding someone to talk it over with who you trust.
It's a carry trade, housewives in Japan have done it. Every trade has risks, what you want to avoid is smacking your own forehead. I have done that numerous times in my life, its not pleasant, in fact it is one of the most unpleasant things.
You want to borrow in a lower interest rate currency which you earn in, and convert the debt it into a higher interest rate currency, locking in an exchange rate which you feel is favourable today.
Nothing wrong with that. just have a chat with someone so you are sure you see all the balls on the table, if it were me and I need to do that with someone preferably over a beer, if it is someone you have a more formal relationship with, what can you do.
Personally, I don't think you need to be an expert to see where the risks are, and I don't think you need to run a scenario analysis either, just be comfortable knowing the different risks that exist and that you are prepared to bear them. That is the best anyone can do when they run a position.
Please support our advertisers:
DB, thanks for the input. You have summed up my motives perfectly in your third paragraph.
Please support our advertisers:
You must be logged in to be able to reply.
Login now
Copy Link
Facebook
Gmail
Mail