Should I use my own bank?
We purchased a holiday home in Spain recently and plan to use it several months a year. We have to regularly top up our Euro account to cover the mortgage payments and utility bills. We've been doing this through the bank so far, what options would a currency broker offer?
There are several options available to you, all of which will be more cost effective than using your high street banks, which give quite poor exchange rates and have higher charges. It's often difficult to organize with them quickly, as you're passed from pillar to post before reaching the right department. Conversely, using a currency broker will mean you can achieve better exchange rates, lower transfer charges, and have the benefit of expert guidance from specialists in the currency market.
So, on to the options you have open to you. You could use a broker in much the same way you currently do it with the bank; get in touch to fix a rate as and when you need to send funds across to your account. This allows you to choose when and how much you send, but also means having to arrange it by telephone, make a bank transfer etc. The second option would be to use a regular payment service.
This usually works by setting up a standing order on a monthly basis, and your funds are automatically wired to your Euro account. It's all dealt with automatically without you having to worry about organizing anything.
Thirdly you could use our online trading platform. This is popular as it allows you to pick and choose the time and amount to convert, 24 hours a day, seven days a week without having to make any telephone calls. In the modern age with an internet connection available to nearly everyone and internet banking facilities now commonplace, this is becoming the most popular method of transferring smaller amounts between £250 and £10,000.
Your final option is locking in a rate for a full year's payments with a Forward Contract. This doesn't give you much flexibility, but does mean you know the exact cost of your monthly transfer, helping you to budget more effectively. The best option will depend on your personal circumstances and attitude to risk.
A free consultation with a specialist broker can provide you with all the information you need to make an informed decision on the right solution for you.