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Aussie advice: exchange $Sg for Oz account.

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Aussie advice: exchange $Sg for Oz account.

Postby ozchick » Sat, 17 Oct 2009 11:07 am

I'm completely hopeless at this kind of thing but hope someone can help me. I'm wanting to put a big chunk of money, about $8,000-10 ,000SG into my housing loan back home in Oz. The exchange rate is bad and getting worse and housing interest rates are starting to rise back home. So I want to do this in the next fortnight since I'll be home anyway and can avoid the DBS bank's 'tranfer fees' (by taking it with me), if nothing else.
My question: After I wihdraw the amount from my SG account, is it worth looking around for an exchange rate before I switch it to Oz dollars to deposit into my housing loan when I arrive in Melbourne next week. If it IS worth it, WHERE does one do this, in Sg or in Melbourne . If in Melbourne, where? I understand to avoid the major banks exchange rates yeah? Sorry but this whole situation is new to me. Any advice welcome. Thanks!
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Postby Nath21 » Sat, 17 Oct 2009 11:17 am

OZ chick I am in the same situation as yourself and I just send through DBS, the charges are not that much really (i think it was S$40 last time and the interest rate is competitive. On the balance your sending home your talking of differences in $10's of dollars. By taking cash with you you will save on the transfer fee but buying aussie dollars in melbourne you will be at a distinct disadvantage because you will get similiar but slightly worse rates (individuals get worse rates than bank to bank transfers because less margin) and small money changes are less competitive than Singapore so you will get worse rate and a fee as well anyway.

I dont know what DBS is charging you of course because you havent disclosed but If it was costing me S$40 to send $10k home and the interest rate was next day bank to bank exchange I wouldnt bother.

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Postby ozchick » Sat, 17 Oct 2009 4:20 pm

Nath21 wrote:OZ chick I am in the same situation as yourself and I just send through DBS, the charges are not that much really (i think it was S$40 last time and the interest rate is competitive. On the balance your sending home your talking of differences in $10's of dollars. By taking cash with you you will save on the transfer fee but buying aussie dollars in melbourne you will be at a distinct disadvantage because you will get similiar but slightly worse rates (individuals get worse rates than bank to bank transfers because less margin) and small money changes are less competitive than Singapore so you will get worse rate and a fee as well anyway.

I dont know what DBS is charging you of course because you havent disclosed but If it was costing me S$40 to send $10k home and the interest rate was next day bank to bank exchange I wouldnt bother.

Tens of dollars only? Well if that is right Nath then yeah it's not worth it. I'm just surprised to hear that banks have competitive interest rates. What's the place I've heard of that negotiates rates for larger amounts- Golden Mile?? Somewhere in Singapore?
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Postby Bafana » Sun, 18 Oct 2009 4:45 am

Wait a while if you can as the exchange rate buying Aussie Dollars is nuts. A solid drop could mean 10-15% additional payment of your loan.
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Postby ozchick » Sun, 18 Oct 2009 8:28 am

Bafana wrote:Wait a while if you can as the exchange rate buying Aussie Dollars is nuts. A solid drop could mean 10-15% additional payment of your loan.

So is it gonna get better Baf? You got any goss?! Ooh I'm worried it's gonna get worse not better and.... ooh....that's all!
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Postby Nath21 » Sun, 18 Oct 2009 10:15 am

Bafana wrote:Wait a while if you can as the exchange rate buying Aussie Dollars is nuts. A solid drop could mean 10-15% additional payment of your loan.


Actually if look at the exchange rate movement with the SG it usually reaches parity over a three year cycle. The difference this time is the unknown USD to which oil is currently traded and hence singapore being the third biggest refinery pins the majority of trading dollars on. Local government has shown no interest to support the local SG dollar in fact from comments in the papers actually prefer a lower exchange rate. Then look at Australia a boutique economy (small number of people) that trades heavily in minerals and agriculture with the rest being mainly service related. With likely 2.5% additional increase in rates next year tipped by over 10 of top 15 economists the aud will actually grow in strength in the short term. My strategy is to send money home now to cover mortgage difference until likely June+ 2011 when I predict the rest of the world will start raising interest rates faster than australia and hence the exchange rate will start to decline. But who knows US could recover? singapore govt might support the dollar, australian economy might slip up. But I would say in the next 12 months aud on the rise against SG not fall. Other staretgies are to hedge, send money home every month and average, al hold out as bafana is suggesting ecah has a risk element.

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Postby stuart12 » Sun, 18 Oct 2009 10:02 pm

i would suggest getting account set up with www.ozforex.com.au. I do the same thing every month. Its easy you get the rate up front, its quite competitive, you put sg into their dbs account and its in your aud account the next day. if you send 10k or more, there is no fee.

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Postby ozchick » Sun, 18 Oct 2009 10:05 pm

Nath21 wrote:
Bafana wrote:Wait a while if you can as the exchange rate buying Aussie Dollars is nuts. A solid drop could mean 10-15% additional payment of your loan.


Actually if look at the exchange rate movement with the SG it usually reaches parity over a three year cycle. The difference this time is the unknown USD to which oil is currently traded and hence singapore being the third biggest refinery pins the majority of trading dollars on. Local government has shown no interest to support the local SG dollar in fact from comments in the papers actually prefer a lower exchange rate. Then look at Australia a boutique economy (small number of people) that trades heavily in minerals and agriculture with the rest being mainly service related. With likely 2.5% additional increase in rates next year tipped by over 10 of top 15 economists the aud will actually grow in strength in the short term. My strategy is to send money home now to cover mortgage difference until likely June+ 2011 when I predict the rest of the world will start raising interest rates faster than australia and hence the exchange rate will start to decline. But who knows US could recover? singapore govt might support the dollar, australian economy might slip up. But I would say in the next 12 months aud on the rise against SG not fall. Other staretgies are to hedge, send money home every month and average, al hold out as bafana is suggesting ecah has a risk element.

Well Nath this is VERY helpful! Thank you! I'm really inclined to thinking positive and HOPE that the exchange rate will improve one way or the other so yeah- decision made!I'm gonna hold off any big deposits into Oz account. How much do you charge to help lost souls like me?! :wink:
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Postby Nath21 » Mon, 19 Oct 2009 3:11 pm

What you also need to consider is how much payment in time that takes of your mortgage instead of waiting. As an example if you sent $10k AUD home (say$13kSG) now you are getting whatever your mortgage rate is (mine is just over 6%), so im making 6% on the money and reducing the term of my loan by 32 months. If I wait until next year (12 months) and the rate say for $10k AUD is $12kSG then ive lost about 5 1/2% $550AUD (as say money is earning 0.5% here in SG) on the money to save $1kSG and missed out on the 12 months reduction on the loan which would equate at the moment to about $20k in payments over the life of the loan. Sometimes trying to save a buck costs you more in the long term. It really depends on what the maturity and rate of your home loan is.

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Postby ozchick » Mon, 19 Oct 2009 6:13 pm

Nath21 wrote:What you also need to consider is how much payment in time that takes of your mortgage instead of waiting. As an example if you sent $10k AUD home (say$13kSG) now you are getting whatever your mortgage rate is (mine is just over 6%), so im making 6% on the money and reducing the term of my loan by 32 months. If I wait until next year (12 months) and the rate say for $10k AUD is $12kSG then ive lost about 5 1/2% $550AUD (as say money is earning 0.5% here in SG) on the money to save $1kSG and missed out on the 12 months reduction on the loan which would equate at the moment to about $20k in payments over the life of the loan. Sometimes trying to save a buck costs you more in the long term. It really depends on what the maturity and rate of your home loan is.


Oh yeah I understand the predicament/options that you explain here but I'm useless at mathematics...So even if I KNEW what was gonna happen to interest rates and the Aussie dollar then I STILL wouldn't know. I read what you write above and I feel a headache coming on! :oops:
Gonna pm you Nath and thanks again!
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Postby durain » Mon, 19 Oct 2009 8:06 pm

nath is correct. the quicker you reduce your mortgage, the better you are saving your money. money in a saving account is dead interest rate if you got a mortgage which has a higher interest rate.

foreign exchange is like a lottery. no one knows whether it will go up or down. you can use forex agent such as ozforex.com.au to track it's trend. also, if you are going to do regular money transfer, a forex agent would give you a better rate than the banks, and ozforex is a good one too.

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Postby jpatokal » Mon, 19 Oct 2009 10:22 pm

ozchick wrote:Tens of dollars only? Well if that is right Nath then yeah it's not worth it. I'm just surprised to hear that banks have competitive interest rates.

For large amounts (esp. $50k+), telegraphic transfer rates at banks are quite good, and definitely competitive with cash rates elsewhere. The fixed fees just mean that, percentagewise, you get screwed if you send small amounts.

What's the place I've heard of that negotiates rates for larger amounts- Golden Mile?? Somewhere in Singapore?

Any money changer will give you a better quote for large amounts. Mustafa in Little India isn't bad, although I'm not sure how much AUD they handle.
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