[Wannaway]

Just thought I might share our experiences regarding changing sterling into Kiwi$ to buy a house (we haven't actually bought yet - waiting for the agent to call to see if our offer has been accepted!).

We have seen a house e like and want to buy, the settlement date is short (6 April) and we are not sure we are ready to change all our sterling up yet - some forecasts suggesting that the dollar could weaken by as much as 10%-12% over the next six months.

One thing we considered was taking out an option to hedge against the dollar weakening against sterling, but this only helps in the situation where we wanted to change up NZ$ back to sterling over a certain period of time. Anyway we looked into it but it is prohibitively expensive so we dismissed that idea.

We then hit upon the idea of asking our bank (HSBC) if we could raise a NZ$ mortgage against the property but maintain a sterling denominated account here in NZ with them which would act as security against the mortgage (along with the property of course). This they will do and so we can buy the house we want, when we want without potentially taking a bath on the exchange. We still have freedom to change the money when we want. There is a cost to this, ie we still have to service the short term mortgage with HSBC out of income, but we calculated that the costs would be amply be covered even the exchange rate only moved 2 or 3% in the period. Of course, if the NZ$ strengthens against sterling then we would be out of pocket.....but hopefully the economist gurus are right and long term decline of the NZ$ is imminent.

[Wannaway]

Update - just heard from estate agent that offer on house accepted! Hurrah!! After 16 months in NZ we will finally have a place to call our own again.

[jo b]

Hey exchange rate at 2.67 if it drops anylower watch this space as the markets have computers set at certain rate to 'dump' weaker currencies so it could drop pretty quickly too.

The market is showing all signs of a weaker dollar which ahs been predicted now for 6 months. This also follows many of the curreny trend graphs we are following it seems to go on a 3-4 yearly cycle when it hits over 3 to the £.

Good luck hang on tight. We will do exactly what you have done when we need to ( i.e. building our own), I think you have done the right thing.

Jo

[Avalon]

I looked at doing at this - but in our case the sterling accounts were term deposits and so you couldnt get the £ to $ when you wanted them.

But then we were never going to be buying without a mortgage here anyway - and i guess that makes a bit of a difference.

Good luck

[Suzy Rimbo]

Avalon

Not sure what interest rate you would be looking for, but the ASB have a on call account that pays the same interest rate as there term account 3.75%, no monthly charges either.

May not seem high but apart from the internet banks in the Uk i havn't come across anything that is much better especially if you dont wish to tie your money up, then you have the hassle of getting some one in the Uk to trans across as and when.

If any one knows of one please tell me.

Suzy

[Avalon]

Suzy-

Thats sounds about right - and remembering back I have a feeling that I didnt quite understand the account I was being offered. It looked like a term deposit - but it was with ASB so I wonder if I got that wrong. I remember HSBC also offering an on call account and that was aboyt 3 - 3.5% interest.

In the end - we needed the money so we didnt have as high a mortgage so I never looked more closely at it.