When you buy a home overseas, the exchange rate can shape the final cost almost as much as the asking price. Sterling routinely moves by several per cent over a few months, and most overseas purchases leave a gap of two to four months between the moment you agree a price and the day you pay the balance. On a €500,000 property, a five per cent move against you, well within a normal year's range, adds more than £20,000 to the sterling cost. The way to control that exposure is to plan the currency side early, understand the transfer tools available to you, and work with Medlock & Thames rather than converting a large sum through your bank on completion day.
Why does the exchange rate matter when you buy abroad?
The risk comes from timing. When you buy in France, Spain, Greece or Portugal you are paying in euros, but your money sits in pounds until you convert it. Exchange rate risk is the chance that the rate moves between the day you commit to a price and the day you settle, changing how many pounds you actually need. A French purchase shows the point clearly. You sign the preliminary contract, the compromis de vente, and pay a deposit of around ten per cent. Completion at the notaire then follows two to three months later, when the balance falls due. If the pound weakens against the euro in that window, the same property quietly becomes more expensive in sterling, even though nothing about the agreed price has changed. The longer the gap and the larger the sum, the more a small percentage move matters.
How much can the currency move before you complete?
Quite a lot, and faster than most buyers expect. In May 2026 the pound traded at roughly 1.158 against the euro, according to European Central Bank reference rates, having ranged across several cents in the preceding months. Against the US dollar it sat between about 1.33 and 1.36. A move of three or four cents can look small on a screen, yet on a six-figure transfer it runs to thousands of pounds. To put numbers on it, a €400,000 apartment costs about £345,400 at a rate of 1.158. If the pound slips to 1.10 by completion, the same €400,000 costs roughly £363,600, an increase of more than £18,000 for a property whose euro price never moved. A forward contract taken at the point of sale would have held the first figure in place. The Bank of England publishes daily spot rates that show how regularly sterling shifts on interest rate decisions, inflation data and political news. None of this is reliably predictable, which is rather the point: you are not trying to forecast the market, you are trying to remove the uncertainty from a purchase you have already committed to.
What are your currency transfer options?
You have three main ways to move money for an overseas purchase, and they suit different stages of the process.
A spot transfer converts your money at today's rate for settlement within a day or two. It is simple and quick, but it leaves you exposed to whatever the rate happens to be on the day, which is rarely ideal for a large completion payment scheduled months ahead.
A forward contract lets you fix today's exchange rate for a settlement date in the future, usually up to twelve months out and sometimes longer. You typically pay a small deposit to secure it, then the balance when the contract matures. For property this is the tool that does the most work: it lets you sign your purchase contract knowing exactly what the property will cost in pounds, whatever the market does before completion.
A regular payment plan automates smaller recurring transfers at an agreed rate, which is useful for ongoing costs such as a mortgage, maintenance or local taxes once you own the property.
These tools are not mutually exclusive. Many buyers use a forward contract for the large completion balance and a regular payment plan for the running costs that follow, so the one-off purchase and the ongoing commitments are each handled in the way that suits them.
When should you fix your rate?
As soon as you are committed to the purchase, which usually means at or just before you sign the binding contract and pay your deposit. In our experience, most UK buyers only start thinking about the exchange rate once an offer has been accepted, by which point the deposit is often due within ten days and there is little time to plan. Fixing the rate with a forward contract at the contract stage means the figure you budget is the figure you pay, which removes the single largest variable from the rest of the process. If you are still searching, you can open an account with a currency specialist in advance so that you are ready to act quickly when you find the right property. The groundwork takes a few days and costs nothing.
What does moving the money actually cost?
The headline fee is rarely the real cost. Most providers, banks included, build their margin into the exchange rate itself through the spread, the difference between the rate they buy at and the rate they offer you. A transfer advertised as fee-free can still carry a poor rate that costs far more than a flat charge would. The practical test is to compare the total number of pounds leaving your account against the euros arriving in the seller's, not the advertised fee. Specialist currency firms generally quote tighter spreads than high street banks on large transfers, and they will usually confirm the all-in rate before you commit. On a six-figure purchase, the difference between a typical bank rate and a specialist rate can comfortably exceed the cost of your legal fees. Two further costs are easy to miss: a handling fee that the receiving bank may deduct at the other end, and a charge some providers add for same-day transfers arranged close to completion. Ask about both before you commit, so the figure you budget is the figure that reaches the seller.
What is the most common mistake UK buyers make?
Leaving the currency to the last minute. Based on the transactions we see, the buyers who lose most to the exchange rate are not those who pick the wrong instrument; they are those who do nothing until completion day and then convert a six-figure sum at whatever the rate happens to be, often through a bank, under time pressure. The fix is straightforward and free: treat the currency as part of the purchase from the moment your offer is accepted, decide early whether to fix the rate, and have Medlock & Thames in place before the deposit falls due. The cost of preparing is nothing; the cost of not preparing can run well into five figures.
How do the rules differ by country?
The currency principle is the same everywhere, but the timetable and the deposit structure that drive your transfer planning vary from country to country.
In France you sign the compromis de vente and pay a deposit of around ten per cent, with a ten-day cooling-off period during which you can withdraw and recover your deposit. Completion at the notaire usually follows within two to three months, by which point the balance and fees must already be cleared in the notaire's account.
In Spain a reservation fee takes the property off the market, followed within days by the private contract, the contrato de arras, which typically requires a deposit of ten to twenty per cent. Completion before the notary, the signing of the escritura, often follows within six to eight weeks.
In Portugal the binding promissory contract, the CPCV, carries a deposit of ten to twenty per cent, and completion at the escritura typically follows thirty to ninety days later. If the buyer withdraws without cause they forfeit the deposit; if the seller withdraws, they owe double.
In Greece you will need a Greek tax number, the AFM, before you can proceed. A deposit of around ten per cent is paid at the preliminary contract, with the final deed signed before a notary usually six to twelve weeks later.
Hungary is the one to plan most carefully, for two reasons. First, since Brexit, UK buyers count as non-EU and must obtain an acquisition permit, which adds roughly two to four weeks and can stretch the timetable to three to five months. Second, Hungary uses the forint, not the euro, and the forint is a more volatile currency than the euro, so the case for fixing your rate early is stronger still.
How do you choose a safe currency provider?
For a transfer of this size, the choice of provider matters as much as the rate on the day. Medlock & Thames operates through regulated payment partners who are required to hold client money in segregated accounts, keeping it separate from company funds. Before you move a large sum, speak to the desk, confirm how your money is held, and check that the receiving details match your notary or lawyer exactly.
Frequently asked questions
Can I fix an exchange rate before I have found a property?
You can open an account with a currency specialist and agree a forward contract once you are committed to a specific purchase. You cannot sensibly fix a rate before you know the amount and the completion date, but you can have everything ready so that you act within hours, not weeks, when your offer is accepted.
Will I be taxed on a currency gain?
Tax treatment depends on your circumstances and the country involved, and currency can interact with capital gains and inheritance rules. This guide covers the currency and transfer side only; you should take advice from a qualified tax adviser and a local lawyer before you commit.
Do I need a local bank account?
Often yes, for ongoing costs such as utilities and local taxes, though the purchase funds themselves usually go to the notary or lawyer's client account. A currency specialist can send funds to either, in the currency and on the date required.
What happens if my purchase falls through after I fix a rate?
A forward contract is a commitment to exchange on a set date, so if your purchase collapses you may need to close it out, which can carry a cost or a benefit depending on where the market has moved. Discuss this risk with your provider before you commit, and align the contract date with a realistic completion date.
Related articles
For country-specific guidance, see our companion guides: Buying in France, Buying in Spain, Buying in Portugal, Buying in Greece and Buying in Hungary. To understand the mechanics of fixing your rate, read how a forward contract works. For the cost detail, see what it costs to transfer money abroad and currency specialist versus your bank.
