Discussion
Not sure if this would work or not?
Currently need to lay my hands on 40 to 50k, so been talking to the knowledgable chaps on here about taking out a mortgage.
Now, this got me thinking, with the interest rates so low over here, why not instead of borrowing 50k borrow 250k instead (sounds mad, but wait a sec). Now use the 50k for the bits I need which leaves 200k, now invest that 200k in a Turkish bank account who are offering a return of 12.25% at the moment. If it were an interest only mortgage, I could use the interest on the 200k to pay the mortgage plus have a bit left over to re invest.
By my reconing I'd have earned enough in interest to have paid the full amount back within 3 years, therefore a free 50k.
Must be something bloody obvious I'm missing here so am prepared for the backlash.
Cheers
Currently need to lay my hands on 40 to 50k, so been talking to the knowledgable chaps on here about taking out a mortgage.
Now, this got me thinking, with the interest rates so low over here, why not instead of borrowing 50k borrow 250k instead (sounds mad, but wait a sec). Now use the 50k for the bits I need which leaves 200k, now invest that 200k in a Turkish bank account who are offering a return of 12.25% at the moment. If it were an interest only mortgage, I could use the interest on the 200k to pay the mortgage plus have a bit left over to re invest.
By my reconing I'd have earned enough in interest to have paid the full amount back within 3 years, therefore a free 50k.
Must be something bloody obvious I'm missing here so am prepared for the backlash.
Cheers
What might happen to your plan if the exchange rate between the UK£ and Turkish Lira were to change against you ?
I know a few people that took out Euro mortgages when pound was £1 + €1.45.
It went down to €1.03 at it's worst but has recovered a bit. It means they have to pay back a hell of a lot more money.
It's a big risk unless you know what the exchanges will do and at the moment no one does.
ex77
I know a few people that took out Euro mortgages when pound was £1 + €1.45.
It went down to €1.03 at it's worst but has recovered a bit. It means they have to pay back a hell of a lot more money.
It's a big risk unless you know what the exchanges will do and at the moment no one does.
ex77
SimonMaidenhead said:
Not sure if this would work or not?
Currently need to lay my hands on 40 to 50k, so been talking to the knowledgable chaps on here about taking out a mortgage.
Now, this got me thinking, with the interest rates so low over here, why not instead of borrowing 50k borrow 250k instead (sounds mad, but wait a sec). Now use the 50k for the bits I need which leaves 200k, now invest that 200k in a Turkish bank account who are offering a return of 12.25% at the moment. If it were an interest only mortgage, I could use the interest on the 200k to pay the mortgage plus have a bit left over to re invest.
By my reconing I'd have earned enough in interest to have paid the full amount back within 3 years, therefore a free 50k.
Must be something bloody obvious I'm missing here so am prepared for the backlash.
Cheers
can I have the number of your IFA pleaseCurrently need to lay my hands on 40 to 50k, so been talking to the knowledgable chaps on here about taking out a mortgage.
Now, this got me thinking, with the interest rates so low over here, why not instead of borrowing 50k borrow 250k instead (sounds mad, but wait a sec). Now use the 50k for the bits I need which leaves 200k, now invest that 200k in a Turkish bank account who are offering a return of 12.25% at the moment. If it were an interest only mortgage, I could use the interest on the 200k to pay the mortgage plus have a bit left over to re invest.
By my reconing I'd have earned enough in interest to have paid the full amount back within 3 years, therefore a free 50k.
Must be something bloody obvious I'm missing here so am prepared for the backlash.
Cheers
I could do with a laugh
SimonMaidenhead said:
Not sure if this would work or not?
Currently need to lay my hands on 40 to 50k, so been talking to the knowledgable chaps on here about taking out a mortgage.
Now, this got me thinking, with the interest rates so low over here, why not instead of borrowing 50k borrow 250k instead (sounds mad, but wait a sec). Now use the 50k for the bits I need which leaves 200k, now invest that 200k in a Turkish bank account who are offering a return of 12.25% at the moment. If it were an interest only mortgage, I could use the interest on the 200k to pay the mortgage plus have a bit left over to re invest.
By my reconing I'd have earned enough in interest to have paid the full amount back within 3 years, therefore a free 50k.
Must be something bloody obvious I'm missing here so am prepared for the backlash.
Cheers
I am sure you're very right, what we could do with the spare when you have paid your mortgage back is start this company call arse ticklers faggots fan club and take out an ad in the back of ...............................Currently need to lay my hands on 40 to 50k, so been talking to the knowledgable chaps on here about taking out a mortgage.
Now, this got me thinking, with the interest rates so low over here, why not instead of borrowing 50k borrow 250k instead (sounds mad, but wait a sec). Now use the 50k for the bits I need which leaves 200k, now invest that 200k in a Turkish bank account who are offering a return of 12.25% at the moment. If it were an interest only mortgage, I could use the interest on the 200k to pay the mortgage plus have a bit left over to re invest.
By my reconing I'd have earned enough in interest to have paid the full amount back within 3 years, therefore a free 50k.
Must be something bloody obvious I'm missing here so am prepared for the backlash.
Cheers
Spread the £200k over a few different, less risk, less return investments? Would still make money, but less of it or it would take more time. Or am I falling into the same trap as the OP?
I did wonder one thing. Who is going to lend you a mortgage for £250k when you only need a fifth of that?
I did wonder one thing. Who is going to lend you a mortgage for £250k when you only need a fifth of that?
Let me see:
1) Exchange rate
2) Fluctuating interest rates
3) Difficulty in getting a foreign interest bearing account
4) Transferring money abroad
5) Getting a mortgage and spending the money elsewhere (unless its a remortgage)
6) Tax on profit
7) Limits on foreign transfers
8) Investigation by TWO governments tax people for potential fraud
Other than that, seems a foolproof plan to me.
1) Exchange rate
2) Fluctuating interest rates
3) Difficulty in getting a foreign interest bearing account
4) Transferring money abroad
5) Getting a mortgage and spending the money elsewhere (unless its a remortgage)
6) Tax on profit
7) Limits on foreign transfers
8) Investigation by TWO governments tax people for potential fraud
Other than that, seems a foolproof plan to me.
SimonMaidenhead said:
Not sure if this would work or not?
Currently need to lay my hands on 40 to 50k, so been talking to the knowledgable chaps on here about taking out a mortgage.
Now, this got me thinking, with the interest rates so low over here, why not instead of borrowing 50k borrow 250k instead (sounds mad, but wait a sec). Now use the 50k for the bits I need which leaves 200k, now invest that 200k in a Turkish bank account who are offering a return of 12.25% at the moment. If it were an interest only mortgage, I could use the interest on the 200k to pay the mortgage plus have a bit left over to re invest.
By my reconing I'd have earned enough in interest to have paid the full amount back within 3 years, therefore a free 50k.
Must be something bloody obvious I'm missing here so am prepared for the backlash.
Cheers
There is definitely free money involved in this scenario. But it is likely to be your 200k that is free for someone else. Currently need to lay my hands on 40 to 50k, so been talking to the knowledgable chaps on here about taking out a mortgage.
Now, this got me thinking, with the interest rates so low over here, why not instead of borrowing 50k borrow 250k instead (sounds mad, but wait a sec). Now use the 50k for the bits I need which leaves 200k, now invest that 200k in a Turkish bank account who are offering a return of 12.25% at the moment. If it were an interest only mortgage, I could use the interest on the 200k to pay the mortgage plus have a bit left over to re invest.
By my reconing I'd have earned enough in interest to have paid the full amount back within 3 years, therefore a free 50k.
Must be something bloody obvious I'm missing here so am prepared for the backlash.
Cheers
It'll never work, credit suisse uk offered me 12% on savings, but after tax and exchange rates (they invested in currency) i was left with a 2% return.
There's also that american fella who has made billions of dollars with currency investments who recently said he had sold all his sterling and investing in currency is the riskiest thing to do at the moment - he is seen as some sort of god in the finance world and people have made money on his words alone so if he is saying its risky, then its risky.
Sending £200k overseas and hoping exchange rates are going to work in your favour is very naive.
There's also that american fella who has made billions of dollars with currency investments who recently said he had sold all his sterling and investing in currency is the riskiest thing to do at the moment - he is seen as some sort of god in the finance world and people have made money on his words alone so if he is saying its risky, then its risky.
Sending £200k overseas and hoping exchange rates are going to work in your favour is very naive.
Edited by LeeThePeople on Monday 9th February 15:52
Unlikely to work for the same reason that companies used to pay bonuses in a similar fashion so that there was not tax to pay:
Banker Bob gets a £500,000 bonus
To pay this Big Bank loans Banker Bob 1000,000,000 Turkish Lira
Banker Bob immediately turns the money into Sterling giving him £1,000,000
Banker Bob waits 2 months for the Turkish Lira to drop like a stone, (it always does/did)
Banker Bob buys 1,000,000,000 Turkish Lira for £500,000 and repays his "loan" leaving him with £500,000 tax free bonus
Lovely, unless you are HMRC who were not very impressed with this. Pretty sure they have closed this loop hole.
Banker Bob gets a £500,000 bonus
To pay this Big Bank loans Banker Bob 1000,000,000 Turkish Lira
Banker Bob immediately turns the money into Sterling giving him £1,000,000
Banker Bob waits 2 months for the Turkish Lira to drop like a stone, (it always does/did)
Banker Bob buys 1,000,000,000 Turkish Lira for £500,000 and repays his "loan" leaving him with £500,000 tax free bonus
Lovely, unless you are HMRC who were not very impressed with this. Pretty sure they have closed this loop hole.
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