When would be a good time...
- Thread starter Freddo
- Start date
It's a bit hard to say.
If it is simply a PPoR loan, I'd say bring it over asap and whack it on the loan immediately.
While you leave your money overseas hoping for the dollar to drop, there is interest accruing daily on your loan over here.
If it is an IP loan, with tax deductible interest, it may be better to keep on servicing the interest on that, and wait a week or so to see what the Aussie dollar does. I can't see it dropping too much in the next year or so, which means it's not going to make a huge difference, unless you've got a few hundred thou to bring over..
If it is simply a PPoR loan, I'd say bring it over asap and whack it on the loan immediately.
While you leave your money overseas hoping for the dollar to drop, there is interest accruing daily on your loan over here.
If it is an IP loan, with tax deductible interest, it may be better to keep on servicing the interest on that, and wait a week or so to see what the Aussie dollar does. I can't see it dropping too much in the next year or so, which means it's not going to make a huge difference, unless you've got a few hundred thou to bring over..
Actually LA Aussie is right - I wasnt taking into consideration interest avoided by dumping it into your PPOR.
Leave it for a week or so - the AUD has lost 2.5 cents against the Sing so far this week and may have more to go - and then reevaluate the outlook for future interest rate cuts. Have a good read of the RBA policy statement to be released 11 August.
Its hard to beat a guaranteed 9% return.
Leave it for a week or so - the AUD has lost 2.5 cents against the Sing so far this week and may have more to go - and then reevaluate the outlook for future interest rate cuts. Have a good read of the RBA policy statement to be released 11 August.
Its hard to beat a guaranteed 9% return.
Which currency do you hold?
As with exchange its not solely dependant on the $aus, but also the currency your holding.
I'm currently working in London and accuring a few extra £££ which I'll be bringing home next year. I'm personally waiting as I'm expecting rates here to maintain or rise, whilst I exptect Aus rates to drop in that timeframe.
The other thing to work out is how much is it really costing you not moving the money at the current rate? Are you earning more with the money sitting there than you could if you brought it over?
As with exchange its not solely dependant on the $aus, but also the currency your holding.
I'm currently working in London and accuring a few extra £££ which I'll be bringing home next year. I'm personally waiting as I'm expecting rates here to maintain or rise, whilst I exptect Aus rates to drop in that timeframe.
The other thing to work out is how much is it really costing you not moving the money at the current rate? Are you earning more with the money sitting there than you could if you brought it over?
Hi, different people, different positions. My perspective is similar to LAAussie. Current drop is the money mkt getting ahead of rate movements. Anticipated drop in cash rate therefore lower AUD.
Let's not forget that it's the USD that precipitated the 'increase' in most other currencies.
It's doubtful whether the band will be more than 5 cents in a short space of time.
Last month, I directed my godson to take profit from his forex exposure. It was AUD/USD 93 cents. Subsequently, went up. Didn't flinch cos he sent his money over @ 84 cents.
Extremely hard to pick the exact top or the precise bottom.
USD still has room to fall cos Freddie M & Fannie M are rocking big time.
Therefore, pick your level & buy AUD. The interest rate differential is +ve
US dropped cash rates while we increased [NZ increased earlier & more than we did] Even if Reserve Bank drops cash rate, AUD is still +ve rate differential then it'll go back up in a narrower & narrower band.
Anyone not on margin has a very low exposure.
Above is my view, not guaranteed 100% accurate. Based on my own position. I did walk the walk. Broker literally begged me fix loan, I insisted Go variable. I locked in 8.5% FD 12 months & accepted 8.77% variable. Not as stupid as it looks. FD is taxfree while variable 8.77 tax deductible.
So depends on what you do overall.
Good luck,
KY
Let's not forget that it's the USD that precipitated the 'increase' in most other currencies.
It's doubtful whether the band will be more than 5 cents in a short space of time.
Last month, I directed my godson to take profit from his forex exposure. It was AUD/USD 93 cents. Subsequently, went up. Didn't flinch cos he sent his money over @ 84 cents.
Extremely hard to pick the exact top or the precise bottom.
USD still has room to fall cos Freddie M & Fannie M are rocking big time.
Therefore, pick your level & buy AUD. The interest rate differential is +ve
US dropped cash rates while we increased [NZ increased earlier & more than we did] Even if Reserve Bank drops cash rate, AUD is still +ve rate differential then it'll go back up in a narrower & narrower band.
Anyone not on margin has a very low exposure.
Above is my view, not guaranteed 100% accurate. Based on my own position. I did walk the walk. Broker literally begged me fix loan, I insisted Go variable. I locked in 8.5% FD 12 months & accepted 8.77% variable. Not as stupid as it looks. FD is taxfree while variable 8.77 tax deductible.
So depends on what you do overall.
Good luck,
KY
If it's a few hundred thousand dollars I would say leave it 6 months at least and make sure it's in a high interest account whereever it is - this should help offset any extra interest on your PPOR.
Anyhoo, even small movement on the exchange rates on a few hundred thousand can make a huge difference and should well offset any extra interest on your PPOR.
What currency are you talking about?
I am in a similar position. Want to bring back a few hundred thousand from the UK in about 18 months. We are actually sending it home already but keeping it in a sterling account until we decide to convert it.
At current rates we'd get about $430k on £200k, but if exchange rates between UK and AUD revert to historic norms (around 40p/$1AUD) then we'll have made an extra $50,000 ($480k AUD). If the AUD goes as low as in 2004 we'll be looking at an extra $100,000 ($520k AUD).
Anyhoo, even small movement on the exchange rates on a few hundred thousand can make a huge difference and should well offset any extra interest on your PPOR.
What currency are you talking about?
I am in a similar position. Want to bring back a few hundred thousand from the UK in about 18 months. We are actually sending it home already but keeping it in a sterling account until we decide to convert it.
At current rates we'd get about $430k on £200k, but if exchange rates between UK and AUD revert to historic norms (around 40p/$1AUD) then we'll have made an extra $50,000 ($480k AUD). If the AUD goes as low as in 2004 we'll be looking at an extra $100,000 ($520k AUD).
