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    • aboylikedave
    • By aboylikedave 7th Sep 17, 11:56 AM
    • 8Posts
    • 0Thanks
    Paying off overseas debts vs UK ones
    • #1
    • 7th Sep 17, 11:56 AM
    Paying off overseas debts vs UK ones 7th Sep 17 at 11:56 AM
    Hello all. I have some debts overseas (mortgage in New Zealand) and some debts in the UK.

    The New Zealand mortgage is borrowed at a higher rate of interest than the UK.

    Do the usual rules apply here i.e. should I simply pay back the debt being charged the higher rate of interest?

    The reason I am asking is that the pound is currently weak (historically) against the NZ dollar. If I pay back NZ debt and then the exchange rate improves I will be worse off than if I had waited.

    Or should I simply also follow the rule of making no assumptions about exchange rate changing?

    Your thoughts would be appreciated on how to approach this.
Page 1
  • National Debtline
    • #2
    • 7th Sep 17, 12:12 PM
    • #2
    • 7th Sep 17, 12:12 PM
    Hi there and welcome to MSE,

    Debts abroad are quite complicated and secured debts can be even more complex. The issue that you have is that your options with the New Zealand mortgage will depend on the law and regulations over there, which people on here will likely struggle to guide you on and you will probably need specialist legal advice. Certainly in the UK if you don't maintain your mortgage payments you risk losing the property, and overpayments can have penalties attached. You may need some advice from a debt service in NZ to find out if this could be a similar risk if you did decide to overpay your mortgage there.

    We can try and help as much as possible if you are struggling with your UK debts. If you can post more information about what sort of UK debts you have then we can try and give more guidance.

    Last edited by National Debtline; 07-09-2017 at 1:29 PM. Reason: typo
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • aboylikedave
    • By aboylikedave 7th Sep 17, 12:22 PM
    • 8 Posts
    • 0 Thanks
    • #3
    • 7th Sep 17, 12:22 PM
    • #3
    • 7th Sep 17, 12:22 PM
    Thanks. I'm not struggling, this is about getting debt free as efficiently as possibly.

    I'll rephrase my question - 'Assuming there are no penalties for overpayment or similar problems or regulations on either the UK or NZ debts.....
    • ReadingTim
    • By ReadingTim 7th Sep 17, 1:09 PM
    • 2,773 Posts
    • 3,979 Thanks
    • #4
    • 7th Sep 17, 1:09 PM
    • #4
    • 7th Sep 17, 1:09 PM
    Usual rules apply - pay off the higher rates first, regardless of currency.

    Any change to that is respect of overseas debts is basically a gamble - it might work out for you, it might not. If you think you can call it, and can afford to lose it, then go for it. If you can't, or just want a simple life, you might decide it's not worth the effort. So, what value simplicity?
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