Foreign Exchange, the Hidden Cost Behind a Property Purchase

Buying a property in France can be an exciting venture. Deciding the region where you would like our French house to be located is one of the first and more challenging decisions to be made with 22 regions to choose from.

Deciding how much you can afford to spend is also tricky. Whether you need a mortgage or you can afford to pay cash, you will need to establish your budget and to do so you will need to bear in mind all the costs involved in the purchase, being the most obvious the taxes and the Notarie fees.

Not all the potential buyers identify at this stage a very important cost that could affect the final price for your property. In fact it could make or break their budget. The payment will need to be made in Euros and this will involve being exposed to the fluctuation of the sterling-euro rate.

In order to understand the real importance of the foreign exchange element in the price of your property it is worth it to have a look at how the rate have been fluctuating this year.

Example

Let’s take a property purchase for a total price of £200,000. The higher rate was achieved on July when the GBP/EUR rate hit 1.4415 while the lowest point was reached on January 2015 with a rate of 1.2694.
Exchanging £200,000 on January or July would have meant a difference of more than £25,000!

Getting familiar with the rates at the early stages of your search will help you understand how they fluctuate. Registering with a foreign exchange specialist does not involve any cost or obligation, plus you will receive free guidance on the markets from the beginning of the search until the time comes to make your payment.

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At Moneycorp we have been helping thousands of buyers with their purchases abroad to make sure that foreign exchange is not an added cost.

If you have payments involving euros it would be a good idea to register with a foreign exchange company such as Moneycorp. They can provide you with free guidance on the progress of the euro and protect your payments from any adverse fluctuations. Plus with French Entrée you can get free transfer fees for life in all your payments.

Mar Bonnin-Palmer is a Senior Key Account Manager at Moneycorp, a foreign exchange expert and a specialist in currency transfers for overseas property. For more information, please visit the FrenchEntrée Currency Page or call +0044 (0) 20 3773 6355.