Buying a property abroad is an incredibly exciting and, in some cases, a life-changing purchase. Amidst all of the excitement, don’t forget about currency! Here are a few reasons why locking in the current exchange rate with a forward contract will help to make your buying journey successful.
Currencies fluctuate all the time
It’s impossible to know exactly where the pound and other currencies will move next and by how much, and your property buying budget could be impacted by this.
One of the sad things about the dramatic swings in the value of the pound is that many people have to abandon their dream to buy a home abroad because they didn’t lock in their currency. Some had even paid a deposit, which they had to lose because a dramatic currency fluctuation took the price of their home beyond reach.
However, you can avoid this situation by using a forward contract. This allows you to lock in the rate for up to 12 months, so you’ll know exactly how much you’ll pay when it comes to buying your property.
Get a quote from us today by completing our simple form. We’ll take a look at your requirements and arrange to speak to you at a suitable time to offer the best possible solution for all of your upcoming currency transfers.
A strong pound
Currently, the pound is trading at strong levels against the euro, reaching a 2021 high earlier this week. This happened after UK inflation rose to 4.2% in October, a huge jump from September’s figure and the highest rate in nearly 10 years.
This high reading could encourage the Bank of England to raise interest rates before the new year – a prospect that has caused sterling to strengthen.
As the pound is strong at the moment, this is the ideal time to open your forward contract. The value of the pound could change at any moment, so you could save thousands by locking in the exchange rate today.
Protect long term and regular payments
You may be paying for a property to be built in stages, which requires paying money over a longer period of time. As well as this, once you move into your property, you may have regular maintenance fees, or you might receive your income or pension in a different currency. A forward contract can be used to protect all these things and more. Take a look at our information about setting up a regular payment plan.
Pure peace of mind
Whether the exchange rate is ‘good’ or not, locking it in will provide you with peace of mind for your property purchase. If you know exactly how much your property will cost, you’ll be able to plan ahead and budget accordingly. As well as this, you won’t lose sleep worrying about whether the exchange rate will move and lose you money on your purchase.
Of course, it is possible that after locking in the rate, the exchange rate will improve. However, exchange rates can be volatile and the rate could drop again in no time. Using a forward contract to lock in the rate is always the safest option.