Currency exchange rate fluctuations are one of the biggest bugbears for expats making payments across different currencies.
Many expats fail to pick up a good exchange rate because they do not shop around and stick with the big banks.
Ian Strafford-Taylor, of money broking firm FairFX, says that another issue is that because of currency fluctuations, the expected regular payment becomes an unknown amount every month.
One solution could be to use a currency broker offering a regular payments service which will carry no transaction fees and generally have a better rate of exchange than a bank offers.
This service can be used for paying a mortgage, pay regular bills and even to send home rent income and have a salary and pension payments transferred cost-effectively.
Fixed exchange rate
In addition, someone using the service could fix their exchange rates for a full year ahead.
The bigger currency brokers will also, unlike banks, allow their customers to set up direct debits.
This method could, says currency brokerage HiFX, save a small fortune – and with some banks
charging up to £30 per transaction there is a huge saving of several thousand euros a year to be made.
Mr Strafford-Taylor of FairFX said: “Setting up a direct debit at a fixed exchange rate could save money but in reality many of our customers choose have their currency broker contact them every month to confirm the amount and delivery details.”
Expats with mortgages will be moving money every month and up until 2007, when the financial crisis hit, there was a wider choice of banks willing to deal with expats.
Unfortunately that’s not the case now and the same goes for an expat looking to buy a property with a mortgage.
Mortgage savings
While some lenders are looking for expat custom, they aren’t always a cheap option with some demanding a minimum £150,000 price or a minimum loan value of £100,000 with a 25% deposit too.
However, one firm based in France says seen a sea-change in recent years with expats choosing to find a French lender rather than one in the UK.
John Busby, a director at French Private Finance, has found expats increasingly looking to remortgage and previously they had avoided French lenders because of the costs and registration tax involved, which could add up to a costly 2.5% of a deal.
He said: “The numbers involved have become more interesting because the rates for mortgages are at historic lows and it makes sense to get a French mortgage.”
