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Borrowing In Foreign Currency - To Invest


Kurt Barlow

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HOLA441

Here in the magical Kingdom the Banks are offering silly Sharia compliant loans of up to 1 Million Riyals (£165K) at 1% APR and the offer extends to Expats. I dunno whats driving it - perhaps the PTB want a slice of printy printy / ponzi action.

Anyway I thought at 1% I could borrow say £110K and use my parents various entitlements to make some low risk investments;

£50K in Zopa - yield about 6%

£30K in Index linked bonds (NSI) yield about 5.5%

£30K in Premium Bonds yield about 1.5%

Good relationship with parents and they are healthy and financially sorted. Job here stable. I could easily meet repayments on £110K loan from my salary. Exisiting assets easily cover £110K in the unlikely event the above money vanished.

Longer term - bottom of the housing cycle I could convert the cash into seed capital for some BTL's. Perhaps 3 years time.

Any thoughts as to the risk side? Any views on where Sterling will be relative to the riyal in 2-5 years time.

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HOLA442

Here in the magical Kingdom the Banks are offering silly Sharia compliant loans of up to 1 Million Riyals (£165K) at 1% APR and the offer extends to Expats. I dunno whats driving it - perhaps the PTB want a slice of printy printy / ponzi action.

Anyway I thought at 1% I could borrow say £110K and use my parents various entitlements to make some low risk investments;

£50K in Zopa - yield about 6%

£30K in Index linked bonds (NSI) yield about 5.5%

£30K in Premium Bonds yield about 1.5%

Good relationship with parents and they are healthy and financially sorted. Job here stable. I could easily meet repayments on £110K loan from my salary. Exisiting assets easily cover £110K in the unlikely event the above money vanished.

Longer term - bottom of the housing cycle I could convert the cash into seed capital for some BTL's. Perhaps 3 years time.

Any thoughts as to the risk side? Any views on where Sterling will be relative to the riyal in 2-5 years time.

Aligning your finances with pre-crash Iceland?

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HOLA443

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