Guest guest67442 Posted August 15, 2012 Share Posted August 15, 2012 We have an idea and want to run it passed some of the very clever people on here just in case we're being a bit stupid :-) We have an offset mortgage for our house in the UK and have decided to rent it out rather than sell it. Before we do get tenants in, we have the opportunity to release some equity from the house. This opportunity closes for us as soon as we have tenants in. What we're thinking is we should grab this cash whilst we can and simply put it in the offset bank account and not spend it. It would then effectively be an interest free loan which we could pay back at any time. The reason we're considering doing this is if the currency rates get better (BIG IF I know), it's money taken from the UK house and put towards the Oz house and take out a smaller mortgage in Oz. Essentially we'd be borrowing the money off our UK house at UK rates which are lower than Oz mortgage rates. If the rate never gets better and the cash is better off staying in GBP, we'd simply pay it back into the UK house having not paid anything to have it sat there. I really can't decide whether it's a brilliant must do or an idiotic mistake. Borrowing money is a serious matter and this would involve a charge on the house but is it the right thing to do? Aargghhh! Words of wisdom somebody please :eek: Link to comment Share on other sites More sharing options...
Guest Posted August 15, 2012 Share Posted August 15, 2012 some people who have lots of equity within their property with no mortgage do borrow money from the bank and put a tenant in the property at x amount each month so it has not cost them any money to borrow their own equity from the bank, i think this is a good idea. Link to comment Share on other sites More sharing options...
ade72 Posted August 15, 2012 Share Posted August 15, 2012 We are doing the same , go for it Link to comment Share on other sites More sharing options...
Guest Shell15 Posted August 15, 2012 Share Posted August 15, 2012 We have done the same, for the similar reasons.. Just wanted to add that hopefully by the time we are ready to sell (4-5 years) house prices here will be on the increase.. Link to comment Share on other sites More sharing options...
Andrew from Vista Financial Posted August 16, 2012 Share Posted August 16, 2012 We have an idea and want to run it passed some of the very clever people on here just in case we're being a bit stupid :-) We have an offset mortgage for our house in the UK and have decided to rent it out rather than sell it. Before we do get tenants in, we have the opportunity to release some equity from the house. This opportunity closes for us as soon as we have tenants in. What we're thinking is we should grab this cash whilst we can and simply put it in the offset bank account and not spend it. It would then effectively be an interest free loan which we could pay back at any time. The reason we're considering doing this is if the currency rates get better (BIG IF I know), it's money taken from the UK house and put towards the Oz house and take out a smaller mortgage in Oz. Essentially we'd be borrowing the money off our UK house at UK rates which are lower than Oz mortgage rates. If the rate never gets better and the cash is better off staying in GBP, we'd simply pay it back into the UK house having not paid anything to have it sat there. I really can't decide whether it's a brilliant must do or an idiotic mistake. Borrowing money is a serious matter and this would involve a charge on the house but is it the right thing to do? Aargghhh! Words of wisdom somebody please :eek: I think that it is definitely worth considering but mainly for the fact that it may help with a deposit and costs when buying here if no other funds are available, see here for a post I have written on this previously on the sister forum PIA http://www.pomsinadelaide.com/forum/pensions-mortgages-ask-vista/31687-cant-sell-uk-property-before-moving-oz.html The part about sending over when/if Sterling strengthens and therefore borrowing at lower interest rates in the UK is not as straight forward as it seems though. If exchange rates do go in favour of sterling then it will be likely that UK interest rates will also increase, there is a strong correlation between exchange rates and interest rates. Regards Andy Link to comment Share on other sites More sharing options...
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