Using a bank to exchange £100,000 could cost you £4000 on a poor exchange rate, another £2000 in commission charges, a transfer fee of £25 and a receiving fee to a Spanish bank of £500.
Banks tend to have a poor foreign exchange rates as well as charging transfer fees and commissions. Foreign exchange companies are much cheaper and user friendly. They also offer you a chance to fix your exchange rate for up to two years which is useful if you are buying off plan and have to make staged payments. It is possible the fixed rate may not turn out to be the best rate but at least you will be certain how much you will have to pay.
Currencies Direct and HiFX are two of the foreign exchange companies to look out for. They do not charge transfer fees and once you have registered with them they will send you an alert when rates are favourable. So it’s a good idea to register as soon as you have agreed to purchase a property.
Examples: (Exchange rate on February 26th)
- Currencies Direct - rate 1.4861 = Euros 148,610 Transfer fee - None
- HiFX - rate 1.48 = Euros 148,000 Transfer fee - None
- Natwest - rate 1.42 = Euros 142,000 Transfer fee - £20
- Halifax - rate 1.4836 = Euros 148,360 Transfer fee £17.50
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