If you're moving abroad, paying for property overseas, sending money to family or paying international staff, the difference between using your UK bank and using a specialist provider is typically 3-5% of every transfer. On a £200,000 property purchase, that's £6,000-£10,000. This guide explains how the FX market works and how to capture the savings in 2026.
Banks charge two layers: an explicit fee (£10-£40 SWIFT charge) and an implicit FX margin (typically 2.5-4% above the mid-market rate). The mid-market rate is what you see on Google or XE — the price banks themselves trade at.
On a £10,000 transfer, a 3% margin = £300. Banks don't disclose this clearly because the rate they quote includes the margin already. Always compare against the live mid-market rate.
Wise (formerly TransferWise): genuinely uses the mid-market rate plus a transparent fee (typically 0.4-0.7%). Best for transfers up to £50,000 and for ongoing low-volume needs.
Currency brokers (Currencies Direct, OFX, TorFX, Moneycorp): assigned account manager, can lock in forward rates for property purchases, typically 0.3-1.0% margin on £25k+ transfers. Best for property deposits and large one-off transfers.
Revolut/Wise Card: virtual or physical multicurrency card. Excellent for spending abroad and small transfers; weekend FX has a small surcharge.
If you've exchanged on a UK property purchase abroad, you may have a 4-12 week wait until completion. A forward contract lets you lock today's exchange rate for delivery up to 12 months out.
If sterling weakens against the foreign currency in that period, you've protected the deposit. If it strengthens, you've missed the upside. Use forwards when you have a fixed liability you can't afford to absorb FX risk on — not as speculation.
£200,000 property purchase in Spain at €1.18/£1 mid-market. UK bank: €1.145 (margin 3%) + £30 fee. You receive €228,970.
Currency broker: €1.176 (margin 0.34%) + £0 fee. You receive €235,200. Difference: €6,230 — about £5,300 saved on a single transfer.
Open accounts with 2-3 providers in advance — switching mid-purchase wastes time. Verify identity early (passport, proof of address) to avoid limits being applied at the worst moment.
For property purchases, use a broker recommended by your overseas solicitor — they'll have a vetted relationship and can co-ordinate transfer timing with completion. Always send a small test transfer (£100) before the main one.
Wise, Revolut and major brokers are FCA-regulated as Authorised Payment Institutions. Client funds are safeguarded — held separately from company funds.
Declarable at UK customs above £10,000 in cash equivalents per traveller. Bank-to-bank transfers have no cap but providers may require source-of-funds evidence.
Statistically, no individual reliably can. Use forwards for known commitments; spread regular transfers across the year to average the rate.
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