Money, money, money......

......must be funny - especially if you are going to buy a house in the Melbourne bay area. Fortunately we are not starting off at 0 due to selling our apartment in Sweden but it will not be enough to buy a house. Therefore we have to take out a loan. Ok – so far so good. Quite normal and simple to take a home loan, were my first thoughts. Well, I have come to realize that it is not as simple as it seems. We would really like to make the most of the money we have, therefore, when and how to exchange and borrow money have become very important. Since I am not very familiar about these things, wanting to learn more and on top of that not trusting advices from banks to any greater extent I have started to follow the market for a couple of months by reading articles and almost obsessively checking the exchange rate (admitting that I sometimes checked it a couple of times a day … hmm am I becoming a nerd? ;-) ). Below are a few things that I have learnt:

• Both Swedish kronor and Australian dollars are volatile currencies. Australian dollars are for example used as a trade currency which makes it strongly dependent on other currencies. In other words – picking the right moment when to change the money is really tricky with currencies that can vary a great deal.


• The interest’s rates are high in Australia. The Central bank has made four interest-rate increases in seven months time. The high interest rate strengthens the dollar – which is not good for us since it will cost more to buy Australian dollars. On the other hand it might be good to exchange the money soon since we then can benefit from a higher interest rate in an Australian bank. I also heard a rumour that the interest’s rate in Sweden will go down by the end of the summer and following this “logic” about interest rates that would of course mean that the Swedish krona would decrease in value while the Australian dollar stay strong.


• If we take out a loan in Australia we will have to pay a high interest rate. On the other hand if we take out the loan in Sweden (which has a lower interest rate on home loans), we run the risk of paying off the loan when the Australian dollar is expensive. In other words – that might cost even more money. Added to that the calculating of cost and risk for taking the loan in Sweden while living in Australia seem quite complex.


• Letting the bank in Sweden help you with changing the money might not be the cheapest option. I have not looked into this any further. Perhaps we should use Forex or some other currency trading company..hmmmm


• Those points above are just a few things affecting the value of the Australian dollars and Swedish kronor, I mean, we should not forget the credit crunch in USA, development in China ……….……..phew…………………………..
  Although, after all I feel a little bit proud over myself for having learnt a few things about the money market even though I am not still sure how and when to change our money………………..