Australian Mortgage Repayments – Impact of USD/AUD FX Movements On Loan Repayments

Here is a chart on the foreign exchange (FX) fluctuations in the USD value of the mortgage repayments, on an Australian loan.

For this example, assumed an Australian Mortgage of $400,000 (AUD). Amortized over 30 years, with a 4.50% interest rate. The AUD monthly repayment is $2,026 (AUD).

If the borrower was to enter the mortgage in July 2016. The USD value of repayment would be $1,540 (USD) when the current spot rate is applied.

In this example, a fixed USD repayment is represented by the red line (applying the July 2016 spot rate).

The blue line represents the historical USD value of the mortgage repayment between the USD and AUD from July 2016 – to June 2018.

As you can see, the AUD represents a volatile currency and can have a significant impact on the FX repayment rate, when sourcing USD funds to make repayments on the Australian loan of AUD $48,642. In the above two-year period, the fixed foreign exchange rate requires the US $36,953 of mortgage repayments, while the floating foreign exchange rate would pay out US $37,197, a difference of US $244 on currency movements.

If you would like specific credit advice in relation to Australian Mortgages as an Expat, please contact hfinance or read more here.

Jeremy Harper is an Expat Mortgage Broker for hfinance, based in New York. To speak more in relation to your situation, please email info@hfinance.com.au or call (+1) 646-961-9611.

hfinance also has offices in Melbourne Mortgage Broker, Preston, Gold Coast or a New York click on one of the following links, to read more.