Overseas Mortgage

[HEALY]

I have recently taken on a mortgage in Australia and moving to HK to start as an SO at CX. I would like to know if you can refinance in Hong Kong for an overseas mortgage or do you link your existing account (HSBC eg) with an oz one to pay.

Any tips on making this work more efficiently greatly appreciated.

[smiley41]

Yes you can. NAB are quite active in mortgage financing and refinancing in HK and would be worth a call. Also I'm sure whichever bank you choose ie. HSBC, Standard Chartered, would be happy to accomodate.

[Speedbrake744]

I used NAB up here for Aussie mortgages. Nice people and helpful too. Alot better than NAB in Aust who are a complete bunch of comlete tossers..

[404 Titan]

HEALY

Just a word of advice. Be very careful moving an AUD$ mortgage to HK with the current high value of the AUD$. If you change it to HK$ you will require 25% equity. When the AUD$ starts to fall and it will when the Australian economy slows under high interest rates and lack of competitiveness with the rest of the world because of the high exchange rate, you may find yourself with less than 20% equity and the bank calling the margin.

[womble006]

Any tips on purchesing a property in the Philippines, banks for morgages and traps for new players

[HandyAndy]

wonble, good day,

Most major banks here will offer mortgages but foreigners cannot own property/land in the Philippines. There is an allowance of owing 30% but it is quite complicated and I don't know if I would wish to go down that route. If you are married to a Filipino, then it is a different matter. We own a house here in Cebu which we have just finished building.

We are in the opposite situation to you as we are contemplating a move to Australia so would probably rent out our place here and rent first and ultimately buy in Sydney.

We bank with both Bank of the Philippine Islands (http://www.bpi.com.ph) and Metrobank (http://www,metrobank.com.ph) both of which are good and offer ebanking etc.

Best!
HA

[Numero Crunchero]

I have to echo 404's currency concerns. But it is quite appealing to be paying 3.5% vs 9.0% in OZ. So caveat emptor.

Should you decide to go down the refinance course, there are many banks that do it. Some have a presence here, some do not. You can use NAB asia, CBA asia, WBC asia, ANZ asia, St George, Lloyds TSB etc or you can go through a mortgage originator will cost you money for doing what you could have done yourself. Most of the aussie banks I have listed are asian subsidiaries of their Australian based parent bank. You will find that they have 'chinese walls' seperating them and so you are effectively operating with a totally seperate bank - don't expect them to know how much cash you have in their aussie bank branch. Most of these banks will let you borrow (as an Aussie asset is involved) AUD, HKD or USD. I think everyone has stopped lending on the JPY due to perceived risks in the carry trade.

So, to keep it simple for us pilots, you approach any of the banks listed, ensure you have about 25-30% equity and then refinance. Your cost of finance is quoted as "cost of funds plus margin". The margin is the banks revenue and would be approx 1.5% for smaller loan. The cost of funds is what the bank is charged for obtaining its funds for you. FOr that, just go to the 3rd or 5th last page of the SCMP and you will see some tables at the top of that page with headings of HIBOR, LIBOR, SIBOR. HIBOR stands for Hong Kong interbank offer rate - the amount banks charge each other for borrowing money. There will be entries for overnight, weekly, 1 month, 2month etc. You will find most banks dealing with mortgages tend to use 3month but that isn't a given. The current rate is about 2.3% but it has been as high as 10% 8 years ago and as low as .15% 4 years ago.

So if you borrowed in HKD they would switch your aussie loan at current exchange rate (hence 404's warning) and then your interest rate(for 3 month) is 3mth HIBOR rate of say 2.3% plus bank margin of 1.5% and you end up with a total bill of 3.8%(Annual rate). This is paid in arrears and interest only. Unlike Australian interest only loans, there is no restriction on you paying principal off on any payments you wish as long as you give them 2weeks notice of the intent.

The SIBOR and LIBOR tables relate to interbank offer rates in SIngapore and London and cover a greater range of currencies. So if you wish to take out an NZD or CHF or GBP or EUR loan you simply find the 3month SIBOR/LIBOR rate in the currency you want, add your 1.5% and thats your knew loan rate.

clear as mud?

[hongkongfooey]

As usual 404 on the money :ok: ( pardon the pun )

NAB will lend up to 80% of valuation if you have something to offset the Currency fluctuation ie: money in an account with them. You can change the currency ( obviously if you change back to AUD you change back to Oz interest rate ) when it fluctuates, but you have to be on the ball. Depending on the size of the mortgage you could be plus or minus 25,000AUD with a .5HKD change. So big money to be gained or lost. If you leave it in HKD, and the AUD drops enough, you will lose a lot more than you gain with the difference in interest rates.

They do seem good to deal with unlike Oz NAB.

[womble006]

HA,

Thanks for the advice, I am married to a Philipina but not living in PHPs so can not take out a loan at those banks,