# International Money Transfers for Property Abroad



## MoneyCanada (Oct 25, 2017)

Relocating abroad? Buying a house in a foreign country for the sake of diversification? Inherited property overseas? Paying your mortgage in another country? 

If any of the above applies to you, you should carefully consider the costs of transferring money abroad through your bank. Unwarranted FX fees that you might not even be aware of are very substantial if you’re moving large sums of money out of the country – especially if you’re exchanging money like this on a monthly basis. 

*The costs of international money transfers
*
When it comes to transferring money abroad, there are two types of fees to be paid.

1) The first and more straightforward charge, is the fixed fees per transfer. At RBC, for example, it will cost you either $13.50 or $35 per transfer. These fees can add up over the months, but they are likely to be your lesser concern.

2) The second fee - which is completely hidden - can add up to a lot more money. This fee is due to foreign exchange markups. Banks are basically selling you foreign currency for a lot more than what they buy it for. If a bank gives you 0.75 American dollars for each Loonie you pay, when the real interbank rate is 0.79, then it means you are getting *paying 5% in fees*. 
Because exchanging foreign currency is somewhat complicated, and the percentages appear low, few Canadians understand the ultimate cost to their pocketbook.

If you’re buying a nice holiday home in Florida and transferring $250,000 for it, you may end up paying an unbelievable *$12,500 in hidden FX fees* alone! And that’s on a single transfer. Even if the rate is much better than 0.75, say 0.77, you are still paying more than 2% or $5,000. You can use the following calculator to calculate your precise fees upon receiving a quote from a bank or check historical transfers made in the past three months. 

Bank alternatives in Canada for money transfers

There are several non-bank foreign currency providers that are happy to take on Canadian clients. These companies are normally headquartered in the UK as 90% of their clientele are British (either residing in the UK or expatriating somewhere else). 

These companies are laser-focused on international money transfers, and international money transfers alone. They DO NOT provide financing or do the 1001 things that banks such as RBC or TD in order to make money for their shareholders. International money transfer companies do not provide saving accounts, credit cards, or worry about wealth management – they just transfer of funds from Country A to Country B as cheaply as possible.

As smaller and less complex operations than banks, they are able to offer wholesale rates as pass these savings on to customers.

MoneyTransferComparison believes that the best way to move money abroad from Canada is through a company named World First, one of the largest and more diverse companies in this industry as per their MoneyTransferComparison’s review. World First charges $0 in fees on transfers above $10,000, but what they do particularly well is researching the competition and then guarantee a rate that is substantially better than what their competitors do (while still charging enough of a slim margin to make a profit). 

Whether you decide to use World First or some other foreign exchange provider, you should always make sure you have negotiated the rates - the more money you transfer in one installment - the higher the chances you would be able to get a better rate for yourself.


----------



## OnlyMyOpinion (Sep 1, 2013)

It's to bad we have to see these spam / sales crap threads on cmf.


----------



## MoneyCanada (Oct 25, 2017)

OnlyMyOpinion said:


> It's to bad we have to see these spam / sales crap threads on cmf.


<- Do you see what's written there under my name. It's Site Sponsor. I am not spamming here senselessly but using the privileges given to me to advertise my services. While I saw other companies just blatantly offer coupons to their service, I tried to come up with something more educational / informational, but in an essence this is still a commercial post of course. I would not call it spam. 

Perhaps you can use this opportunity to pass on questions to MoneyTransferComparison's staff instead of spewing out criticism? Although I do realise you disappointed with CMF's "Site Sponsor" feature more than anything else.


----------



## OnlyMyOpinion (Sep 1, 2013)

Thanks for the suggestion, let's agree to disagree, that's what makes user forums so helpful. You keep spewing out site sponsor advice hoping to hook a few dollars and I'll continue to spew out critical responses to those coming here to try to part people from their money.


----------



## kcowan (Jul 1, 2010)

When we bought our snowbird place, we had Canaccord transfer the money from our USD investment account to American Title. No fees. BMO tried to add a fee but CCD got it reversed.


----------



## Mortgage u/w (Feb 6, 2014)

Wouldn't trust any third party provider.

Fees are what they are at the banks for a good reason - security.

Want more peace of mind - use the old fashioned bank draft.


----------



## off.by.10 (Mar 16, 2014)

Mortgage u/w said:


> Wouldn't trust any third party provider.
> 
> Fees are what they are at the banks for a good reason - security.
> 
> Want more peace of mind - use the old fashioned bank draft.


Uh, no. They are what they are because most people are unware of them. The whole "we charge what the market will bear" thing. I don't see how a bank draft will work around FX fees either.

The same is true with credit cards. Most of them charge insane FX margins. A very few are more reasonable. As much as this is a sales pitch, it is also good to raise awareness of this topic.


----------



## MoneyCanada (Oct 25, 2017)

Mortgage u/w said:


> Wouldn't trust any third party provider.
> 
> Fees are what they are at the banks for a good reason - security.
> 
> Want more peace of mind - use the old fashioned bank draft.


When you use either of these companies, your money is secured in a bank. Their recipient accounts are segregated and on your name, so if the company goes bust, the money is restored back to you. Most of these companies don't even do the SWIFT themselves, they use... banks!

These companies are essentially wholebuyers of currency who get better rates, not as good as banks (they buy their own currency from the bank), but much better than what clients get at banks (and that rolls over to their preferable rates).


----------



## MoneyCanada (Oct 25, 2017)

OnlyMyOpinion said:


> Thanks for the suggestion, let's agree to disagree, that's what makes user forums so helpful. You keep spewing out site sponsor advice hoping to hook a few dollars and I'll continue to spew out critical responses to those coming here to try to part people from their money.


I am by no way parting people from their money. Whatever fees I get do not reflect on what clients get. In fact MoneyTransferComparison.com has a lot of unique offers for clients that register through it, and with some companies like Moneycorp, you get preferred rates and no wire fees. 

On everything else we can surely agree.


----------



## Edmonton_mike (Mar 9, 2018)

*free currency exchange CAD / USD*

Hi guys - it's my first post to this site so go easy on me. 

On this topic of currency exchange, I had a subscription to Money Sense magazine and I learned of something called the 'Norbit Gambit' as a way of exchanging CAD / USD or vice versa for free. The basic idea is to put the desired money into an ETF called Horizons (symbol 'DRU'), then ask your brokerage to settle the trade in your starting currency. Then ask the broker to journal the shares over to the equivalent ETF in the other currency, and then sell those ETF shares. Yes you'll pay two commissions but that's likely around $10 each, so for any significant sums, this can save a lot.

A more complete description can be found on the Money Sense magazine website. Or just do a google search for Norbit Gambit for how to do this.

No I do not work for and am not affiliated with either Money Sense magazine nor with this Horizons ETF. I've also not tried this technique so I can't vouch for it personally but I thought I'd share what I've heard on the topic.


----------



## Eclectic12 (Oct 20, 2010)

Edmonton_mike said:


> Hi guys - it's my first post to this site so go easy on me.
> 
> On this topic of currency exchange, I had a subscription to Money Sense magazine and I learned of something called the 'Norbit Gambit' as a way of *exchanging CAD / USD or vice versa for free*.
> 
> The basic idea is to put the desired money into an ETF called Horizons (symbol 'DRU'), then ask your brokerage to settle the trade in your starting currency. Then ask the broker to journal the shares over to the equivalent ETF in the other currency, and then sell those ETF shares. Yes *you'll pay two commissions but that's likely around $10 each*, so for any significant sums, this can save a lot ...


Not sure why you would write that the currency exchange is "free" then correctly say there is the two commission cost to the exchange.
OOH, it is good to point out that there are other options while OTOH, novices may be put off by the contradiction.

As well, some here on CMF prefer to use large interlisted stock like a bank instead of DLR. What capabilities for the NG transaction that one has access to from one's broker likely plays into which one decides to use.




Edmonton_mike said:


> ... A more complete description can be found on the Money Sense magazine website. Or just do a google search for Norbit Gambit for how to do this.


Are you saying that the Money Sense article is clearly than the threads here on CMF that have covered this several times and years back?
Surely being able to ask questions beats an article?

BTW, google is likely to retrieve threads here on the topic so where one is already browsing CMF, it might be faster to search here. There are lots of other sources that will be listed where only a few will have the chance for one to ask questions. 


A search here lists among other threads:
https://www.canadianmoneyforum.com/...best-way-to-exchange?highlight=Norbert+gambit
https://www.canadianmoneyforum.com/...o-exhange-CDN-for-US?highlight=Norbert+gambit
https://www.canadianmoneyforum.com/...bit-at-Scotia-ITrade?highlight=Norbert+gambit
https://www.canadianmoneyforum.com/...Norbert-Gambit-at-TD?highlight=Norbert+gambit
https://www.canadianmoneyforum.com/...-at-BMO-investorline?highlight=Norbert+gambit
https://www.canadianmoneyforum.com/...ted-stocks-for-gambit-trades?highlight=shogam

There is also the Short First Gambit:


> carrier = TD
> conversion size = 11K USD
> market exchange rate = 1.30363
> gambit exchange rate = 1.30304
> *net FX conversion fees = 0.05%*


https://www.canadianmoneyforum.com/showthread.php/64970-ShoGam-short-first-gambit?highlight=shogam


Cheers


----------

