Currency Transfer: Moving Money Between the UK, Germany and Spain

Why Exchange Rates Matter More Than You Expect

For non-residents whose income is in sterling, euros (from Germany, Switzerland, or the Netherlands), or US dollars, every transfer to Spain involves a currency conversion. The cost is not just the transfer fee — it's the spread between the mid-market rate and the rate the bank or provider actually gives you.

Consider the numbers for a GBP buyer purchasing a €600,000 property:

• At a mid-market rate of GBP/EUR 1.18, the purchase costs approximately £508,500
• A bank charging a 2.5% spread offers a rate of approximately 1.15 — adding £13,000 to the cost
• A specialist provider offering a 0.5% spread over mid-market offers a rate near 1.17 — the additional cost drops to around £2,500

The difference: over £10,000 on a single transfer. This is not a rounding error.

How Banks Handle Currency Transfers

High-street banks — both in the UK and Germany — typically handle international transfers in one of two ways:

• SWIFT transfers: your bank sends euros to the recipient's Spanish bank account via the SWIFT network. Charges include a sending fee (£15–£40 or €15–€40), a correspondent bank fee (variable, often hidden), and the exchange rate spread. Total cost on a large transfer: 2–3% of the transferred amount
• SEPA transfers (within the eurozone): if you already have euros, SEPA transfers between EU/EEA bank accounts are typically cheap or free for amounts under €50,000. German and Dutch buyers with euro income may find SEPA transfers the most cost-effective route for smaller, regular payments to Spain

Specialist Currency Providers

Several specialist providers focus on currency transfer for property buyers and overseas property owners. They typically offer:

• Exchange rate spreads of 0.3–1% over the mid-market rate (compared to 2–3% at high-street banks)
• Dedicated account managers for large or complex transfers
• Forward contracts and rate alerts
• Direct payment to Spanish escrow accounts, notaries, or solicitors

These providers are regulated — Wise and Currencies Direct are authorised by the FCA in the UK; they hold client funds separately and are not banks. For transfers above €50,000, most require some level of identity and source-of-funds verification.

Forward Contracts: Protecting Your Purchase

When buying a property, there is typically a gap of two to eight weeks between agreeing a price (often in euros) and completing at the notary. During that time, exchange rates can move significantly.

A forward contract (also called a forward exchange contract) locks in the exchange rate today for a transfer that will be made at a specific future date. You know exactly what your Mallorca property will cost in sterling or your home currency.

How it works:

1. You agree a price of €550,000 for a property in Sóller
2. You approach a specialist provider and agree a forward contract to convert £470,000 to €550,000 in six weeks at a fixed rate
3. You pay a deposit (typically 5–10% of the contract value)
4. At completion, you pay the balance to the provider and receive €550,000 to fund the purchase

The cost of a forward contract is built into a slightly less favourable rate than today's spot rate (the forward points reflect interest rate differentials between the two currencies). However, for many buyers, certainty of cost is worth more than potential upside from currency movement.

SWIFT Codes for Spanish Banks

If you are making a direct bank-to-bank international transfer to your Spanish account, you will need your Spanish bank's SWIFT/BIC code:

Your Spanish IBAN (starting ES followed by 22 digits) and your bank's BIC/SWIFT code are all a sending bank needs to route a transfer to your Spanish account.

Practical Tips for Non-Resident Property Owners

1. For a property purchase: use a specialist provider (Lumon, Currencies Direct, or Moneycorp) with a forward contract to lock in the rate. Do not transfer the purchase funds through your high-street bank's standard FX service.
2. For regular annual payments (IBI, tax, insurance): set up a standing instruction with Wise or a similar provider. The convenience and rate are hard to beat for amounts up to €10,000.
3. Compare rates on the day: even specialist providers vary. Get quotes from two or three for any transfer above €10,000.
4. Keep a balance in Spain: rather than transferring money every time a bill arrives, maintain a €1,000–€2,000 buffer in your Spanish account and top it up quarterly or annually in one larger transfer — you pay the spread once instead of multiple times.