If you’re planning to buy a holiday home in Spain you could make your purchase more affordable by looking into your options when it comes to foreign currency exchange.
Whether you’re focusing your property search in Madrid, Seville or Barcelona, using a specialist currency transfer service to move your funds abroad rather than a bank could help you save thousands.
So what should you be considering when buying property overseas?
Securing a competitive exchange rate
The rate at which your money is exchanged can make a serious difference to how much you receive, with even a seemingly marginal variation really adding up. Some specialist foreign currency providers can undercut the exchange rates offered by banks by as much as 90%, meaning you could save thousands when transferring the size sums involved in a typical property purchase.
For example, if you had £250,000 to finance your Spanish property investment and your bank offered you a Pound to Euro exchange rate of 1.34, you’d have €335,000 to spend on your dream home. However, if a broker secured you a rate of 1.39 you’d have €347,500 at your disposal. That extra €12,500 could really broaden your property options or give you the cash you need to renovate your new home, so it’s well worth using the provider who gets you the most competitive rate.
Avoiding transfer fees
Something else you should consider before picking a foreign currency provider is whether or not they levy transfer fees. While most high-street banks do charge transfer fees, some specialist currency brokers don’t – helping you save even more.
Taking advantage of specialist services
When buying a property in Spain you’ll have enough to consider without worrying that your funds are being exposed to currency risk. But the currency market is extremely volatile, meaning exchange rates can experience swift and dramatic movements – shifts which could have a negative impact on the money you’re using to finance your property purchase.
You can protect your transfer from exposure to currency risk by using the specialist risk-management services offered by some providers.
One such service, a forward contract, allows you to fix a favourable exchange rate for up to two years in advance of a trade. By fixing a rate in this way you can budget for your property purchase effectively and know you won’t get stung if the market moves against you.
Making sure your funds are secure
Enjoying serious savings on your currency transfers is important, but so is making sure the provider you’re using has measures in place to ensure the security of your funds. You should always use a provider that’s authorised by the Financial Conduct Authority (FCA) and adopts both stringent compliance procedures and segregated client accounts.
Buying a property in Spain is sure to bring you many years of happiness and by focusing on the areas outlined above – competitive exchange rates, no transfer fees, specialist services and fund security – you could save thousands on your purchase.