The real cost of moving money abroad to buy a property is rarely the fee you are quoted; it is mostly hidden in the exchange rate. Providers, banks included, build a margin into the rate they offer you, so a transfer advertised as fee-free can still cost far more than a flat charge would. The only reliable test is to compare the total number of pounds leaving your account against the euros arriving in the seller's, the all-in rate. This guide explains where the cost comes from and how to compare providers properly. For the full picture, see our guide to buying property abroad.
Where does the cost actually come from?
There are three places a transfer can cost you. The first and largest is the spread, the difference between the wholesale rate at which a provider buys currency and the rate it offers you. On a six-figure transfer, a wide spread can quietly cost more than every other fee combined. The second is the transfer fee, a flat charge per payment, which some providers levy and others fold into the rate. The third is the receiving cost, a handling charge that the destination bank or an intermediary bank may deduct at the other end, so slightly less arrives than you sent. Of the three, the spread is the one buyers notice least and pay most.
Why does a fee-free transfer still cost money?
Because the margin has simply moved into the rate. A provider can advertise no fee and still earn a healthy margin by offering you a rate a long way from the wholesale level. The headline fee is visible and easy to compare, so it gets the attention; the spread is invisible unless you check it against the live mid-market rate, so it does not. The Bank of England publishes daily reference rates you can use as a benchmark. If a provider will not show you the all-in rate before you commit, that is itself worth noting as a sign the margin may be wide.
How do you compare providers properly?
Ignore the marketing and do one calculation. Ask each provider exactly how many pounds will leave your account for the exact number of euros that will arrive in the recipient's account, on the day, with all charges included. That single all-in figure is the only fair comparison, because it captures the spread, the fee and any deductions in one number. Get it in writing, and get it for the actual amount and date, not a sample quote. On a property purchase, where the sum is large and the date is fixed, a small difference in the rate translates into a meaningful difference in pounds.
What does a currency specialist do differently?
A specialist that deals in large transfers generally quotes a tighter spread than a high street bank and will usually confirm the all-in rate before you commit, so there are no surprises on the day. It can also fix the rate ahead of completion with a forward contract, so the figure you budget is the figure you pay, and it can time the transfer to land exactly when your notary or lawyer needs it. For how rate-fixing works, see how a forward contract works, and for the wider comparison, see currency specialist versus your bank.
How do you get the best rate on a property transfer?
A few simple steps make a measurable difference. Compare the all-in rate from two or three providers for your exact amount and date, not a sample quote, and ask each to confirm the figure in writing before you commit. Fix the rate early with a forward contract if you want certainty, rather than converting under time pressure on completion day. Plan ahead so you are not paying for an urgent same-day transfer when a standard one arranged a few days earlier would do. None of this requires you to predict the market; it simply removes the avoidable costs from a payment you have to make anyway. For how rate-fixing works, see how a forward contract works.
Which costs are easy to miss?
Two in particular. The first is the receiving charge: some destination banks deduct a handling fee, so confirm whether the full amount will arrive or whether a buffer is needed to cover the gap. The second is an urgency charge: arranging a same-day or priority transfer close to completion can cost more than a standard transfer arranged a few days ahead, which is another reason to plan early rather than convert under time pressure. Ask about both before you commit, so the figure you budget is the figure that actually reaches the seller.
Frequently asked questions
Is it cheaper to use a no-fee provider?
Not necessarily. A no-fee provider can still build a wide margin into the exchange rate, which on a large transfer can cost more than a flat fee would. Compare the all-in rate, the total pounds out for the euros in, rather than the advertised fee.
How much does it cost to send money to buy a house abroad?
It depends entirely on the rate, the provider and the amount, so there is no fixed figure. The sensible approach is to compare the all-in rate from two or three providers for your exact amount and date, and to fix the rate early if you want certainty.
Are large currency transfers safe?
They are when you work with Medlock & Thames. Speak to the desk before sending anything.
Should I fix the rate or wait for a better one?
For a purchase you have already committed to, fixing the rate removes the risk of it moving against you before completion. Trying to time the market with a six-figure sum you must pay on a fixed date is a gamble rather than a plan.
Do I pay tax on the currency itself?
The transfer itself is not taxed, though a currency gain can interact with UK tax in some circumstances. This guide covers the transfer cost only; take advice from a qualified tax adviser.
Related articles
This guide is part of our overseas property series. For the full framework, read Buying Property Abroad: A Currency Guide for UK Buyers. See also how a forward contract works, currency specialist versus your bank, and our country guides for France, Spain, Portugal, Greece and Hungary.
