How to save money on buying property overseas
Buying property overseas can be a fantastic investment, whether you're looking for a bolthole abroad or a more permanent home. The purchasing process might seem a little daunting when you're unsure about expenses, but there are a few simple ways to make sure you're getting the most for your money.
Map out your costs
Put together a comprehensive budget that covers every individual expense. These are likely to include:
- deposit
- mortgage
- legal fees
- local taxes
- professional translation of documents
- utility charges
- insurance.
Certain costs, like the deposit, will vary as a percentage of the property price across the world. Consulting country-specific guides, like our Spanish property buying guide, is a simple way to find out about local market variations.
Get local legal advice
Find a lawyer who speaks your native language and is licensed to practice in that particular country. Make sure they're specialised in international transactions and are part of an independent professional body for solicitors, like the Law Society in the UK. Choosing someone with a deep understanding of local laws, with the credentials to back that up, is essential for keeping costs low.
Choose your mortgage wisely
Whether you decide to take out a mortgage at home or abroad, make sure you've got a solid grasp of all your options. Take note of how each bank deals with exchange rate fluctuations and factor in how this could affect your monthly repayments. You could also opt for a mortgage provider that operates in your home country and the country you’re buying in – HSBC, for example, operates in 72 countries.
Use a foreign exchange broker
When it comes to international money transfer, banks and money transfer sites are convenient for low-level or occasional transfers. They're not, however, cost-effective for larger or more regular ones, which buying property abroad will inevitably involve. Using a foreign exchange broker can significantly save on the cost of those payments. Because brokers buy currencies in bulk, you’ll also get a more competitive exchange rate in return.
Fix your rates
You can use certain future-proofing tools to lock in great – and, most importantly, reliable – rates. A ‘forward contract’ for example, can fix the rate for your deposit long before you need to make the payment. A ‘fixed payment plan’, meanwhile, can set rates for your monthly mortgage payments for up to six months at a time. This gives you peace of mind when budgeting for expenses and protects you from sudden exchange rate changes.
For more information about buying foreign property, download our free guide: Everything you need to know: purchasing property abroad.
