Using a Currency Specialist
Why use a currency specialist to transfer your money overseas?
When you’re buying a property overseas, one of the most important - but often overlooked - considerations is how you will transfer your funds to the new country to physically pay for your property. Many buyers take what appears the obvious option - using their own bank to send their deposit, followed by the full payment. You are then at the mercy of the exchange rates that day, and often eye-wateringly high bank charges.
Many people don’t realise they can save money on their purchase - and indeed on ongoing transfers such as mortgage payments, living costs, pensions etc - by making some simple plans in advance with a specialist currency firm.
Securing your rate with a Forward Contract
A currency specialist offers products and services to help you protect your money and secure your dream property. One of the most popular of these is a tool called a Forward Contract, which allows you to set a rate now for a transfer in the future. This protects you from adverse exchange rate movements in the future, allowing you to plan your budget knowing exactly how much you will be spending and receiving in both currencies.
For example, if you have an offer accepted on a property in Spain €300,000, that property would cost you £223,880 in pounds at a sterling-euro exchange rate of 1.34. However, if the exchange rate was to fall to 1.28 while the property purchase is going through and you are waiting to complete, the actual cost in sterling would go up considerably to £234,375 – incurring a substantial loss of £10,495, just from a change in the exchange rate.
Why can they get me better rates than a bank?
Currency brokers can generally offer you more favourable rates than the high street banks; clients could save up to 4%. This means that when you are buying a property in Spain for €250,000, the rates you could receive may save you up to €10,000.
This is due to the way that specialist currency companies obtain their exchange rates; a bank will usually set their rates in the morning with a wide margin to ensure they make a profit, despite any significant rate fluctuations during the day. In contrast, a currency specialist can utilise the most up-to-date live rates and therefore work on much smaller margins, reflecting a true exchange rate.
Is it safe / secure, and are there fees involved?
When you are transferring such a significant amount of money overseas, it is natural to be concerned about the security of your funds. When you choose a currency specialist to work with, it is vital that you ensure the one you choose is authorised and regulated by the Financial Conduct Authority (FCA).
Unlike your local bank, who will usually charge you between £20-40 on every transfer you make with them, most currency specialists offer a fee-free service – only charging for the smallest transfers. Just by choosing a currency specialist over a bank, you automatically save money, and it all adds up when you count each currency transfer you need to make.
At what point would I need to set up an account?
As soon as you have decided you want to purchase a property overseas. Once you open this account, you have access to the expert knowledge of your personal account manager, as well as the numerous resources and tools that can help you plan your transfer at the best time – minimising your risk and maximising your funds.
This means that as soon as you find your dream property, you are able to call your account manager there and then to authorise the transfer of your funds and immediately pay your deposit to secure your property – knowing exactly how much you are spending.