Currency Exchange: A Buyer's Guide
Brits purchasing a home overseas are most certainly required to pay deposits and final payments in the local currency. Many of them are forced to accept the poor exchange rates and the sky-rocketing fees offered by their banks. Surveys show that around 50% of holiday home owners still use their banks for international transfers, despite the expensive fees and slow service. Banks still retain the lion's share of the currency exchange market with brokers only accounting for a small percentage of deals transacted.
Also, the conversion of home buyer's money remains one of the least considered details of buying a property. However, our brief review below is designed to prove that by using an independent currency exchange firm rather than your bank, you could potentially save yourselves thousands of pounds. Read on.
What Do You Need to Consider?
There are two elements to the charges for currency exchange: the fees and the exchange rate used. Brokers claim they offer better exchange rates than banks because they use wholesale rates which banks use tourist rates. Fees are usually charged separately. There may be transfer fees from the institution in the UK and fees imposed by the overseas bank to receive the funds.
Be careful with these and double check in advance!
What Are the Options?
No matter what amount you are sending, there are alternatives to the high street banks and PayPal from leading currency exchange dealers.
A very trusted and competitive currency exchange firm is hiFX. The service offered by hiFX makes the banks look archaic. They offer live exchange rates (try their extremely user-friendly online currency converter on their website hiFX.co.uk), fast easy and convenient online transfers with no hidden fees.
hiFX Online provides you with the quick and easy way to convert £50 - £300,000 online in a few clicks wherever you have access to the internet. That is an online service, you don't need to telephone your broker or stand in line at the foreign exchange counter of your bank.
And it's cheap! Let's compare. If you're sending £10,000 into Euros with hiFX, the amount you'll get is €12,550. You can do that 24/7 online using your credit or debit card and you'll pay zero fees.
Alternatively, you can use PayPal. If you send £10,000 into Euros with PayPal (provided that your PayPal account is set up and verified!), the amount you'll get is €11,944 which is €606 less than what you'll get with hiFX. And you'll have to pay £340 in transfer fees.
With HSBC you can send £10,000 and get €11,923 which is €627 less than what you'll get with hiFX. You'll be required to pay £17 transfer charge when arranged online, £30 if arranged over the phone.
If you send £10,000 into Euros with Barclays, the amount you'll get is €12,358 which is €192 less than what you'll get with hiFX. The transfer charge is £15 or £25 transfer charge for priority payment (1-3 days to transfer). You must hold a Barclays Current Account with Telephone banking to use this service. It cannot be arranged online.
The information on this page is designed to help you understand more and make more informed choices. We do not receive any commissions, instead we are funded from companies that we advertise on our website.