Why you should use a currency exchange specialist when purchasing a property overseas
Did you know that if you’re buying a property abroad, you could end up thousands of pounds worse off by simply making an overseas payment via your high street bank instead of using a currency exchange specialist?
There are three simple ways that a currency exchange specialist can help save you a significant sum of money…
Competitive current exchange rates
When you transfer funds from a bank account held in Pounds Sterling to an account in a foreign currency, the high street banks don’t offer a very competitive rate and often charge additional commission just to transfer the money. In fact, it’s one of the ways they make easy money at the expense of their customers.
Currency exchange companies offer much better exchange rates and can save you up to 5 per cent of the property purchase price. Considering, you’re potentially talking tens or hundreds of thousands of pounds for the cost of a property, 5 per cent can be a pretty hefty sum! Enough for a new swimming pool or a few years’ worth of flights to your new property abroad perhaps?!
Timing the transfer of funds
When buying your dream property abroad most people want to make sure they get the best deal they possibly can, from haggling down the price of the property to shopping around to get quotes for lawyers’ fees. But amongst all the excitement of purchasing a property abroad the impact of the currency rate can often be forgotten. However, the current currency exchange rate can have a huge impact on the overall cost of the property purchase. Currency exchange specialists can work with you to help time the transfer to minimise the effects of adverse currency rate fluctuations.
Fixing currency rates
Currency specialists can also arrange to ‘fix’ a favourable exchange rate for up to two years, so that you’re not susceptible to the interest rate fluctuations at the time of the transfer of funds.
This can be particularly useful if you’re negotiating a mortgage deal or setting up utilities too, as your monthly payments will not vary from month-to-month, allowing you to budget monthly outgoings more easily.
Fixing the rate when you make an offer for a property can provide peace of mind as, regardless of what happens with the exchange rates, you will know the exact the amount you will have to pay on the purchase completion date. This can also save you a heck of a lot of money on the property purchase price should the rate go against you between making your offer and handing over the balance of the purchase price on the completion date.
All this might sound too good to be true, but trust us, it’s not! The reason that currency specialist companies are able to offer better exchange rates is because they handle a high volume of international money transfers therefore they are able to negotiate a competitive rate. Unlike the banks, however, they pass these savings onto their customers as their business model is to offer clients ‘bank beating’ exchange rates.
Currency Specialists vs High Street Banks
David and Pam are buying a three-bedroom villa in Valencia, Spain for €200,000 but their funds are in GBP so they need to convert it into Euros.
After comparing the currency exchange rates of their local UK bank and a currency specialist they realised that by using a currency exchange company they could save a significant amount of money…
|High street bank rate||Currency specialist rate|
|Amount to be paid in €||€200,000 @ €1.10/£1||€200,000 @ €1.14/£1|
|Total Cost in £||£181,818.18||£175,438.59|
So, by using a currency specialist instead of their bank, they saved £6,379.59* on the purchase price of the property. That’s definitely enough to buy a cerveza or two to enjoy on their new sun terrace!
Setting up an account and transferring funds with a foreign exchange specialist is free and is also very quick and simple – it can take a matter of minutes. Once you have an account set up it’s a simple case of transferring your funds from your bank to your currency exchange account. Then the money can be exchanged into the relevant currency and sent to the intended account at the click of a button or a short phone call.
In contrast, many high street banks have a cap on the value of funds that can be transferred online or via telephone when making international transfers, which means that a trip to your local branch is probably required to arrange the transfer of funds…and we all know how laborious an unnecessary bank visit can be!
- Set up an account ahead of any property viewing trips. That way you’re ready to proceed with a property purchase as soon as you find your dream property.
- A good currency specialist will be happy to explain how they can help, how the exchange process works and how it can save you money, without pressing you to commit to using their service.
- Check out online reviews of the currency exchange company to see what other people have to say and their experiences.
- When choosing a foreign exchange currency specialist make sure it is regulated by the Financial Conduct Authority.
- Don’t believe people that say banks are safer when it comes to making international money transfers. So long as your chosen currency exchange specialist is regulated by the FCA your money is protected.
For more information about currency exchange or if you’d like a recommendation for a regulated currency specialist who can assist you with your international payments, contact our friendly team on 01244 478911 or email us at email@example.com.
*Exchange rates are subject to change.
Article published: May 23, 2018