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How to Save on Overseas Property Payments

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Whether you’re thinking of investing in a foreign property or paying overseas mortgages, a bank can offer overseas financing to ease your financial burden. However, you need to meet the bank’s eligibility criteria to get a loan. On top of mortgage loan payments and interest rate fluctuations, there are additional costs you could avoid.

Here are some tips on how to save on overseas property payments:

1. Avoid unnecessary transfer fees

If you’re using a bank to transfer money internationally, you will likely need to pay additional transfer fees.

What can you do?

Instead of transferring through a bank, you can find a currency transfer specialist who doesn’t charge a transfer fee, while still providing you with a competitive exchange rate. Let’s take a look at the fee breakdown if you’re buying a retirement home in Australia for AUD 300,000 and making payments across 6 months. Should you be doing a bank transfer or look for a currency transfer specialist?

Related: Multi-Currency Accounts: Now You Don’t Have to Pay Forex Fees and Queue at Money Changers

Types of Fees Local or Foreign Bank WorldFirst
Cable/ TT Fees from remitting or beneficiary banks SGD20

 

(Typically between SGD30 to SGD50)

Free
Cable commission SGD35

 

(Typically between SGD10 to SGD120)

Free
Handling commission SGD35

 

(Typically between SGD5 to SGD40)

Free
Exchange rate:

 

Assuming fixed exchange rate over 6 months, SGD needed to send AUD50,000 per month

SGD49,860

 

SGD49,760
Savings compared to bank transfer, in 6 months SGD190 x 6

= SGD1140

Assuming you’re making mortgage payments over 6 months, using a money transfer specialist, like WorldFirst, can potentially save you SGD540 on outward fees. And, we have yet to consider the exchange rate changes over 6 months. This brings us to the next saving tip.

Read: Guide to expenses involved in purchasing a new property

2. Overcome unfavourable exchange rates

The exchange rate moves daily, which can either work for or against you. We have limited control over the exchange rate since it is affected by external factors such as economic indicators, political news and even bank announcements. However, you can educate yourself about the overseas property market and take advantage of the free tools available.

Read also: Money Changer Tips: You Don’t Have to Be a Math Genius to Read and Compute Rates

What can you do?
a) Get a free currency alert

If you are not in a hurry to make overseas transfer payments, try using a free alert tool. These tools personalise your rate alert to monitor changes in currency pairs and alert you once your desired rate is reached. WorldFirst provides a free currency alert tool which shows you the mid-market rate, also commonly known as inter-bank rate. Do note that the rate quoted to you by banks and money specialists is not the mid-market rate. In order for them to function as a business, they will likely take a margin or fee from their service to you.

Check out: Feeling Broke? You’ll Need This List of Money-Saving Tools for Working Adults

b) Firm orders

Firm orders allow you to lock down a rate and automatically transact on your behalf once it hits your rate of choice. Hassle free!

Most currency transfer companies and banks offer these value-adding services, however, do take note of terms and conditions for the company you engage with.

Read also: 3 Best Ways to Remit Money and Knowing What Works for You

Navigating the currency market may seem daunting, but with these crucial saving tips, you’re one step ahead in making an informed choice on your overseas property payments.

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The post [Infographic] 6 Things to Learn About Money from Warren Buffett appeared first on algo investing.

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