Once again I’m reading in a major UK newspaper about people transferring large sums of money from one country to another, via their bank. Doing this is costing them a fortune.
Something like 500,000 Brits own a home overseas. Most of those owners used their bank to convert their cash into the local currency to buy their home. Whether they are retirees, people emmigrating , people buying foreign property as an investment or just those buying a holiday home, the cost is the same.
Some of those contemplating this kind of purchase come here to ask questions about the details of emmigrating to Canada, but few ask about HOW to buy, in regards to how to actually buy the foreign currency they need for the purchase of a home when they get there.
So this post is about doing that in the most cost effective way possible. The answer is to use a foreign currency trading company or forex company as they are called. It doesn’t matter what country your funds are in initially or what country you are buying in, the principles are always the same.
Here are some examples of what someone from the UK who needs funds in Euros to make their purchase could expect. The figures given were correct on February third.
To buy €100,000
Cost in £ Rate
Lloyds TSB 71,128.81 1.4059
HSBC 70,826.55 1.4119
Bank of Scotland 69,194.58 1.4452
Natwest 69,156.29 1.4460
Nationwide 69,032.17 1.4486
Barclays 68,306.01 1.4640
CFX 68,245.41 1.4653
FCD 68,056.70 1.4685
HIFX 67,888.66 1.473
That’s a difference of up to £3,032 !!!! If you were looking at buying a property worth around £225k it could be a difference of around £10,000 or over $20,000 if you were buying Canadian dollars.
The last three on the list are forex companies. Commercial FX (CFX), Foreign Currency Direct (FCD) and HIFX are just three of many.
All exchange is calculated in relation to the Interbank rate. The interbank rate is the rate at which banks exchange money between them in amounts over £4 million. Forex companies can charge just over this rate as they are exchanging large amounts every day. Most have a minimum amount they will exhange. Usually around £5,000. Their price moves by the minute in line with the money market.
NO BANK will ever offer as good a price. So if you are contemplating a need to convert a large amount of cash it pays to arrange to set up an account with one of these companies. I’m not suggesting you use one of the three above, they are just a sample. Forex companies exist around the world so find one from your home country and shop around checking their exchange rates. Personally I use a company called Moneycorp.
Something like 500,000 Brits own a home overseas. Most of those owners used their bank to convert their cash into the local currency to buy their home. Whether they are retirees, people emmigrating , people buying foreign property as an investment or just those buying a holiday home, the cost is the same.
Some of those contemplating this kind of purchase come here to ask questions about the details of emmigrating to Canada, but few ask about HOW to buy, in regards to how to actually buy the foreign currency they need for the purchase of a home when they get there.
So this post is about doing that in the most cost effective way possible. The answer is to use a foreign currency trading company or forex company as they are called. It doesn’t matter what country your funds are in initially or what country you are buying in, the principles are always the same.
Here are some examples of what someone from the UK who needs funds in Euros to make their purchase could expect. The figures given were correct on February third.
To buy €100,000
Cost in £ Rate
Lloyds TSB 71,128.81 1.4059
HSBC 70,826.55 1.4119
Bank of Scotland 69,194.58 1.4452
Natwest 69,156.29 1.4460
Nationwide 69,032.17 1.4486
Barclays 68,306.01 1.4640
CFX 68,245.41 1.4653
FCD 68,056.70 1.4685
HIFX 67,888.66 1.473
That’s a difference of up to £3,032 !!!! If you were looking at buying a property worth around £225k it could be a difference of around £10,000 or over $20,000 if you were buying Canadian dollars.
The last three on the list are forex companies. Commercial FX (CFX), Foreign Currency Direct (FCD) and HIFX are just three of many.
All exchange is calculated in relation to the Interbank rate. The interbank rate is the rate at which banks exchange money between them in amounts over £4 million. Forex companies can charge just over this rate as they are exchanging large amounts every day. Most have a minimum amount they will exhange. Usually around £5,000. Their price moves by the minute in line with the money market.
NO BANK will ever offer as good a price. So if you are contemplating a need to convert a large amount of cash it pays to arrange to set up an account with one of these companies. I’m not suggesting you use one of the three above, they are just a sample. Forex companies exist around the world so find one from your home country and shop around checking their exchange rates. Personally I use a company called Moneycorp.