More of us are transferring major sums of money abroad to buy property, service mortgages or even emigrate. Getting the best currency exchange rates depends on whether you’re making regular or one-off payments – or both.
In an increasingly global economy, it’s not just banks and businesses that need to transfer money abroad on a regular basis – it’s individuals.
The trend is partly down to the fact we holiday abroad more often. And while we’re not talking about the £9.8 billion Britons spent on overseas holidays in 2010, there’s no denying foreign travel has increased our appetite for big ticket spending abroad.
In particular, increasing numbers of us visiting countries for business or pleasure are falling in love with our surroundings – encouraging us to invest in property, mortgages, property maintenance and other items that require either one-off or regular currency exchange.
We take a look at the most popular reasons you may need to transfer money abroad, and help you to avoid losing money on expensive currency exchange transactions.
So read on to learn more – and to save!
1. Buying property abroad
It’s not hard to see why Brits are increasingly seduced by the thought of owning a home abroad.
With cheap flights to all corners of the globe, it’s easy to follow the sunshine in the winter months. And what better way to enjoy it than from your own home in your favourite country?
However, if you buy property abroad it’s important to make sure your budget isn’t wrecked by currency exchange rates and fees.
If you’re lucky enough to have the money to buy a property outright, a reduction in currency exchange costs could put even more properties within your grasp. So be sure to check the rates offered not only by banks, but also by currency exchange brokers – the latter usually offer you a more favourable currency margin rate, and that could save you thousands.
2. Foreign mortgages and maintenance payments
Even if you can’t afford to buy your house in the sun with a single payment, you may be able to secure a mortgage in the country in which you’re buying property.
But even if you get a good deal, fluctuations in inflation and exchange rates can have significant knock-on effects on your mortgage repayments. So, once again, seeking a low currency exchange rate can help stretch your budget over the course of the loan.
Similarly, if you have to pay regular sums for property maintenance fees or ground rent, it’s important to cut costs where you can.
Because mortgages and maintenance costs are regular foreign exchange payments, it’s all to easy to make the mistake of paying expensive bank transfer fees – these could amount to some £30 per transaction, losing you hundreds of pounds over a typical year.
So shop around for the best deals – you’re most likely to find a low-cost service with no transfer fees if you go to a currency exchange broker like TORfx.
Companies like these allow you to fix the exchange rate on Euros or Dollars for up to 12 months – making regular payments affordable and predictable. They also allow to you take the prevailing exchange rate each month, which could benefit you if it is very low.
If you fall in love with a new country so much that you decide to emigrate, you may need to consider currency exchange for both one-off and regular payments.
For example, you may sell your house in the UK and use the capital to buy a house abroad.
However, you may also have regular income from the UK, such as a state pension, maintenance payments from a former partner or similar. In these cases you will not only need to organise currency exchange that offers low exchange rates, but also a service that doesn’t charge expensive regular transaction fees.
Balancing your currency exchange needs
These days, we increasingly transfer money abroad for big ticket items like property and mortgages.
It’s great news for individuals and families who want to spend more time abroad or even emigrate, but fluctuations in currency exchange rates can wreak havoc with your budget – especially at a time when prices are rising in many countries, and the cost of living is getting higher.
The key to getting the best currency exchange deal is to determine whether you need the best deal on a one-off payment, or value on a series of regular payments.
Don’t neglect to check the deals offered by banks and other currency exchange outlets – but if you’re serious about savings, research what currency exchange brokers can offer you. As they usually offer lower exchange rates and don’t charge transfer fees, you can save yourself significant sums on every transaction you make.