When you are buying a property abroad it's a dream come true for most of us, but this dream can easily turn into a nightmare if not done rationally. How does currency price change affect your overseas property buying?

Let's take an example, you are a British resident and are buying a new villa in Spain. As the villa is new, you would not be paying the whole amount in one go. You will need to put down a deposit with the developer, and then further stage payments (installments) during the construction over the next 12 months, with a final payment upon completion. You have agreed on a price for the Villa and all the payments will have to be made in Euros.

However, the actual cost of the villa (in Sterling) will be dependent on the time you actually buy the Euro to pay the developer. Now, if Pound Sterling strengthens during next few months 24 months, the actual cost will decrease but if the Euro strengthens then your costs will increase. You will need to spend out more Pound Sterling than you estimated for the same amount of Euros. Which means that your property has just became more expensive! Just to give you an idea of the damage it could do to you, the price of Euro was 1.5219 in June 2004 and later in May 2005 it was 1.4526. If the property price is €200,00 it could cost you £137,684 instead of £131,414 that you originally thought.

With RationalFX, you can fix the rates for up to 2 years in the future. This means that the exchange rates are guaranteed for that particular day in future when you have to make the payment. You have complete peace of mind as you remain in control. Another example could be of outright purchase of a resale property, where there is a time lag between the "Offer Acceptance" and "Completion of sale" dates. The currency price change can just rock your budget. With our experienced team at RationalFX, we help you identify such risks. We are determined to save you money and protect you against any such risks.