Why open a Foreign Exchange Trading Account in advance

by Mark Stücklin

Mallorca is part of the Euro-zone, which means that you will need Euros to buy property in Mallorca. The number of Euros you will need will depend upon the value of the property and the size of the Euro mortgage if any, that you use. Basically you will need Euros to pay for all the costs (property and transaction costs) that your Euro-mortgage doesn’t cover.

If you already have your funds in Euros then you will not need to buy them. However, most British people buying a property in Spain hold their own funds in Pounds Sterling rather than Euros, which means that they have to buy Euros before they can purchase a property.

Generally speaking, the most expensive way to buy Euros is from your high street bank, and the cheapest way is from a specialist currency broker. The difference in price for the same amount of Euros on the same day can add up to many thousands of Pounds so this is certainly an issue to pay attention to.

To buy Euros at a competitive rate you will need to set up a trading account with one of the specialist currency brokers. This can usually be done quickly so it is not necessarily an expensive mistake to leave this until you have found a property. On the other hand, exchange rate movements can be quite dramatic in relatively short periods of time so it is certainly a good idea to discuss the exchange rate outlook with a specialist when you first decide to buy and start fixing your budget. If it looks like the Euro is on a strengthening trend (getting more expensive) it may make sense to buy your Euros many months before you buy.

If you place the right bet on exchange rate movements you can save yourself thousands of pounds – or increase your budget significantly. On the other hand, nobody knows for sure what will happen to exchange rates in the future, not even the specialist brokers, so there will be no guarantees that you will make the right decision. Nevertheless, you should look into this issue, select a foreign currency broker and open a trading account at this stage rather than in a rush later.

This article is a part of the Comprehensive Guide of Buying Property in Mallorca which includes all the steps like defining your Spanish property needs to appointment of an independent lawyer. 

Morgan and Morgan are well versed with using FX foreign exchange companies in Mallorca and can introduce you to a number of reputable brokers.

We have been working with a Cornish based company for nearly 11 years now TorFX, one of the largest FX companies in Europe who have been highly competitive for our buyers.

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