Is the Aussie dollar and high Aussie domestic interest rates crippling your property portfolio return. If you live outside of Australia and have good income/cash flow then there are options for you with foreign currency loans through Australian lenders.  How does this sound  6.76% GBP or 2.19% SGD or 3.83% USD (rates current 22/9/2008) and even better rates possible for high income earners or investors with substantial assets.

Normally when you borrow from an offshore lender you are forced to refinance on your return to Australia - this is because offshore lenders are not permitted to lend to Australians resident in Australia.   Refinancing costs money and what's more if you return to Australia to live you may start a new job and be ineligible for any finance for up to 6 months. 

Using our Australian lenders the refinance rule does not apply.  We have major Australian lenders who can offer loans at competitive rates in USD, JPY, CHF, GBP, EUR, HKD and SGD.  Income or asset qualifications apply and unhedged loans (loans not supported by income in the same currency) further LVR restrictions apply.  However this means you can earn in USD and pay JPY rates!

You may also split the loan and have part foreign and part Australian dollar or you can switch back to AUD at any time ($350 fee applies with one lender and free switch with the other).  By  borrowing in another currency you expose yourself to FX fluctuations this applies if and when you either pay the loan or revert to AUD.  It also  applies  to LVR limitation where the  FX movement increases your relative LVR - this may result on a call to adjust your LVR by the addition of cash or other security.

For example on a $500,000 loan amount a 10% rise in the AUD would result in a $45,401 windfall - of course a fall in the AUD would work the other way and if you were already at maximum LVR you may be required to make up the shortfall.  The following chart is latest from the RBA showing AUD against GBP and CHF

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