When an HVDC system is subjected to AC side short circuit faults, the transformer core might be driven to saturation at fault recovery due to flux offset. The saturation will therefore cause the flow of inrush currents. In this paper, dynamic models of a MMC based VSC-HVDC system incorporating transformer magnetisation characteristics are derived and verified. Using disturbance sensitivity functions, the impact of attenuation of inrush currents due to different locations of current sensors (of inner current controller) is investigated. It is shown that placing the current sensor at the converter side of the transformer enable the inrush currents to attenuate faster and prevents the converter from overcurrent exposure, allowing it to more successfully ride-through faults.