How far in advance can I fix a rate?

Usually up to one or two years for forward contracts, depending on the currency pair.

What if my purchase falls through after booking a forward?

Terms vary, but you may need to complete the exchange or pay a cancellation fee – always check the terms before committing.

Are options always expensive?

Option premiums are typically 1–3% of your transaction amount , depending on the currency pair and the term.

Should I wait for a better rate?

No one can predict the market. If the rate fits your budget, it is often safer to secure it.

Can I use more than one strategy?

Yes – many buyers fix some of their exposure and leave some open for potential upside.

When should I fix my exchange rate for a property abroad?

Usually once you've agreed the price and know the completion date – often at exchange of contracts. Fixing earlier removes the risk of the rate moving against you while the purchase goes through.

Do I have to pay for the whole forward contract upfront?

No. A forward is buy now, pay later – you normally pay a deposit (margin) when you book it and the balance before completion.

Can I pay the deposit and the balance at different rates?

Yes. Many buyers pay the deposit at spot and fix the balance with a forward, or book separate forwards for each staged payment on a new build.

Should I fix the deposit as well as the balance?

You can, but many buyers don't – the deposit is usually due soon, so the rate risk is small. The balance is where the big exposure sits, because it's larger and further away.

What other costs should I budget for in the local currency?

Taxes, notary or legal fees, registration costs and any works or furnishings. Add them to the amount you protect, or you'll still be exposed on part of the purchase.

Can I fix the payments on an off-plan property?

Yes. Each stage payment can be covered by its own forward contract, matching the dates in your build schedule, so every instalment has a known cost in pounds.

Buying Property Abroad: How to Avoid Losing Thousands in Currency Costs

Harry Mills is Managing Director of Oku Markets – he helps private clients move and protect their money across currencies.

Buying property abroad means making two purchases: the property and the currency to pay for it. If the pound weakens between agreeing the price and completion, the home costs you more in sterling. Lock in your rate with a forward contract, keep flexibility with an option or hold the currency in a multi-currency account.

Currency fluctuations can quickly turn your dream overseas purchase into a financial nightmare. Even small rate changes can cost you thousands — here's how to protect yourself.

Buying property abroad is exciting, but currency fluctuations can quickly turn your dream purchase into a financial nightmare. Even small changes in exchange rates can cost you thousands of pounds – sometimes enough to buy a car or fund a luxury holiday.

Here’s the reality: if you’re buying a €500,000 property in Spain and the pound weakens by just 5% between agreeing the price and completion, you’ll pay around £23,000 more. That’s money that could have stayed in your pocket with the right currency strategy.

Why Currency Costs Matter More Than You Think

When you buy property abroad, you’re essentially making two purchases: the property itself, and the foreign currency needed to pay for it. Most people focus entirely on the property price and forget that the currency element can swing by thousands of pounds.

Let’s say you agree to buy a Spanish villa for €500,000 when the exchange rate is 1.15 (so £1 = €1.15). You’d need roughly £435,000. But if the pound weakens to 1.10 by completion day, you suddenly need around £455,000 – an extra £20,000 out of nowhere.

This isn’t theoretical. Currency markets move daily, and property purchases often take months to complete. The longer your timeline, the more exposed you are to these fluctuations.

Strategy 1: Lock in Your Rate with a Forward Contract

A forward contract is like currency insurance for your property purchase. You agree today on the exchange rate you’ll use for your completion payment, regardless of what happens to currency markets between now and then.

This is the most common approach for overseas property buyers. It eliminates uncertainty and lets you budget with confidence from the moment you exchange contracts.

Strategy 2: Keep Your Options Open with Currency Options

A currency option gives you the right to use a specific exchange rate – but without the obligation. You pay a small upfront fee (a “premium”) for this flexibility.

This approach suits buyers who want downside protection but don’t want to miss out if the market moves in their favour, or those with uncertainty around timing or the final amount.

Strategy 3: Use a Multi-Currency Account

A multi-currency account lets you hold euros (or whatever currency you need) and control when you convert your money. If the rate looks good today but your purchase is six months away, you can convert now and hold the funds in euros until you need them.

Your currency timeline: from offer to completion

Most overseas purchases follow the same rough path – and each step is a currency decision, not just a legal one.

Offer accepted. You know the price, but not yet the final timetable. This is the moment to work out your budget ceiling – the worst exchange rate you can still afford.
Deposit. You’ll usually pay a deposit when you sign, or soon after. Many buyers simply pay this at the spot rate on the day.
Exchange of contracts (or local equivalent). You now have a completion date and a firm amount. This is where most buyers fix the balance with a forward contract.
Staged payments (new builds). Off-plan purchases are often paid in instalments. You can fix each one separately, so every stage has a known sterling cost.
Completion. The balance goes to the notary or lawyer – plus taxes, legal fees and sometimes furniture or works. Don’t forget those, because they’re in the local currency too.

If the completion date slips – and it often does – a forward can usually be extended to the new date. Tell us as soon as you know.

A worked example

Say you’re buying a €400,000 villa and the exchange rate is €1.15 to the pound.

Deposit, €40,000, paid at spot (1.15): about £34,800.
Balance, €360,000, fixed with a forward at 1.14: about £315,800, whatever happens to sterling between now and completion. The forward rate can be slightly different from spot, because of the interest-rate gap between the two currencies.
Without the forward, if the pound slips to 1.10 by completion: the same €360,000 costs about £327,300 – roughly £11,500 more.

That’s the whole point of fixing: not to beat the market, but to know your number. (These rates are illustrative, not a forecast.)

Real-World Example

The Johnsons agreed to buy a €600,000 house in France at £1 = €1.20 (so £500,000). Closer to completion, the rate dropped to €1.10. Without protection, they’d have needed £545,000 – an extra £45,000.

But they had taken a forward contract at €1.18 and paid around £508,500 – roughly £37,000 less than at the worst-case rate.

Practical Tips for Any Strategy

Act early. The sooner you engage a currency specialist, the more options you have.
- Know your budget ceiling. Work out the worst rate you can still afford – then make sure you’re protected against it.
- Don’t wait for a better rate. No one can predict the market. If the rate fits your budget, it’s often safer to secure it.
- Use a specialist, not your bank. Currency specialists are usually within 0.5–2% of the real rate; banks can be as much as 3–6% away.

Watch Out for Hidden Costs

Beyond the exchange rate, watch for transfer, intermediary and receiving-bank fees as well as the rate. A specialist provider should be transparent about all costs before you agree to anything.

We help individuals design practical, no-nonsense currency strategies for their international property purchases. Get in touch at info@okumarkets.com or call 0203 838 0250 for a straight-talking review of your currency requirements.