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Repayment of Overseas LOC

Discussion in 'Finance & Banking' started by Sacko, 31st Jan, 2011.

  1. Sacko

    Sacko Well-Known Member

    Joined:
    20th Aug, 2007
    Posts:
    69
    Location:
    Central Coast, NSW
    I'm looking into securing a LOC on a relative’s unencumbered PPOR in the UK as it looks as through I can lock in a rate of around 2.59% for 2 years, I'd prefer 5 years but need to do some more research on what the rate would be 5 years.

    I plan to use the funds to pay off some non-deductible debt, including getting my PPOR LVR to 80% and set up a LOC facility and invest the other half within my family trust.

    I currently plan to pay off the bulk of the debt by reducing my LOC each month by the difference in the current repayments and the interest only loans on my PPOR and the UK LOC.

    My question is whether this is the best way to repay the amount, or should I out the payments into a UK based managed fund each month to minimise the exchange rate risk, i.e. the AUD falls against the GBP during the period, in particular towards the end of the intended repayment period.

    Any thoughts on this would greatly appreciated....
     
  2. Sacko

    Sacko Well-Known Member

    Joined:
    20th Aug, 2007
    Posts:
    69
    Location:
    Central Coast, NSW
    Student loans? - I think you are barking up the wrong tree, but thanks for trying to help.

    Any how I've decided to hedge the currency risk using CFDs. So as not to lose any further up side I'll look to lock in a price once the AUD falls 5% against GBP.