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How much could a forward contract save on your overseas property purchase?
When budgeting for a property abroad, it’s probably important to you that the price you agree is the price you end up paying. But if you’re setting your budget in one currency (say, pounds or dollars) but paying for a property in euros, exchange rate fluctuations mean that the price you finally pay might be nothing like the one you agreed.
For example, if you agree a price on a €200,000 property abroad when £1 buys €1.20, it will cost you £166,600. But if, by the time you come to complete, £1 only buys you €1.15, you’ll need to find £173,900 – another £7,300.
Now you know how much you could save, find the right forward contract for you.
A forward contract takes away that worry. As soon as you agree a price, or even before, just lock in your exchange rate for the year ahead with a forward contract. Then, the price you’re budgeting for a property abroad will be the one you pay. Talk to our currency partner Smart Currency Exchange about doing that.
Of course, currencies can work in your favour too, and the property cost less, but that would be a gamble. A forward contractor takes the risk away.
To see it in action, use this calculator to work out how much you could have saved using a forward contract for your overseas property purchase had you bought in the past year. Then make sure to book a forward contract with our currency specialists.
How to use our forward contract calculator:
- Choose the currency you hold, for the ‘From Currency’ field.
- Decide your budget for a property abroad in that currency. If you’re not sure, estimate it based on your affordability calculator or those you like on our property portal.
- Choose the currency you’re buying a property in, for the ‘To Currency’ field.
- Choose the time range you want to calculate currency fluctuations for.
- See how much a forward contract could have saved you.
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