Now we’ve decided to buy a property in Australia we’re starting to care about things that didn’t interest us before such as the GBP to AUD exchange rate and how to move funds from the UK to Australia.

If we sell our property in the UK in order to purchase a home in Sydney we will need to transfer a lump sum from the UK to Aus. These days you wouldn’t go to your High Street bank to make a large international money transfer, in fact for relatively small amounts it is beneficial for individuals to use a foreign exchange service.

Transferring money with your High Street bank

If you walked into a UK High Street bank to transfer thousands of £s to Australia, they would complete the transaction for you, at their current exchange rate and charge you commission. Usually the commission is around £30 and the exchange rate offered won’t be competitive.

Transferring money with a foreign exchange service

There are a number of foreign exchange services that can transfer your money around the world. TorFx is based in the UK. In 2010 TorFx was awarded “”Best European Currency Broker” by Overseas Living Magazine and was positioned 23rd in the Sunday Times Fast Track 100 list for being one of the UK’s fastest growing independent companies.

Although TorFx are based in the UK they transfer funds all around the world including from and to Australia.

TorFx offer considerable savings on money transfers to Australia. We recently talked to them about transferring our money and have learnt that the overall saving compared to using a UK High Street bank can be between 3% and 5%.

How do foreign exchange services work?

A foreign exchange service transfers your money via a bank (TorFx use Barclays Bank) so the service is as safe and secure as using a bank. Your saving is obtained in two ways 1) TorFx purchase currency at wholesale rates enabling them to offer competitive rates to their clients 2) TorFx include a small profit in the exchange rate (which is still much lower than the bank’s) and do not charge any other fees or commissions. Once you have agreed a rate with TorFx that’s exactly what you get for your money.

How much can you transfer?

The more you transfer the higher the savings. One-off transactions typically start at £5,000 and it’s normal to transfer much more. TorFx regularly transfer large sums required to pay for property abroad, in particular the deposit needed to purchase property in Australia.

Smaller transactions are permitted as part of a regular program i.e. if you’re sending money monthly to cover a mortgage or school fees in another country.

The tricks of the trade

When transferring money with TorFx you will be assigned an Account Manager who advises you on all aspects of your money transfer. They aren’t allowed to tell you exactly when to exchange your money but they will ensure you receive the best guidance and information available so that you can make an informed decision.

Part of the TorFx service is to keep you up to date with market news. You can view Australian currency news on their website as well as receiving tips on forthcoming events that may affect the market. Depending on how involved you want to be you can become something of a currency expert in no time.

Other tips and tricks available are: a stop contract, a stop-loss order, a limit order and a forward contract. My brain went a little numb when I initially read these terms but if they can save you thousands you’d better wake up and read on!

What’s a Spot contract? A spot contract is a standard currency transfer. Your funds are ready to transfer and you authorise the transaction at the current exchange rate being offered by TorFx. What’s a Stop-loss order? A stop-loss order uses a minimum currency rate. Your funds are ready but the transaction is only processed if the exchange rate is at the minimum rate you define.
What’s a Limit order? A limit order uses a higher exchange rate than the current market rate as a trigger to process your transaction. If the exchange rate achieves this limit your transaction is automatically processed. You can create a stop-loss (minimum) and limit (maximum) called an OCO (Order Cancels Order) so that you know your funds will be processed within a predefined range, i.e. whichever point is triggered first. What’s a Forward contract? A forward contract allows you to fix an exchange rate that you wish to use in the future. You can book the exchange rate up to 2 years in advance and need to pay a 10% deposit. This is useful if you suspect the exchange rate is going to fall and you are waiting to receive funds i.e. from a property sale. Forward Contracts have a Fixed Maturity Date but Time Options are a variance of Forward Contracts where you have flexibility to alter the Maturity date.

If numbers and currency aren’t your thing it’s easy to glaze over when reading this information, but when you’re transferring your hard earned money from one country to another it’s worth taking note and reaping the benefits. TorFx explain that by using their services instead of a High Street bank to transfer £200,000 families may save up to 5% – that’s £10,000 towards your property deposit, or several family holidays.

If you are transferring a large lump sum it is worth checking with your bank that there are no limits on transferring funds to TorFx. You don’t want to lock in a rate and find that your UK bank is going to delay things with paperwork; some banks will only permit large transfers if you visit the bank in person (not an option if you’re already overseas) so you may need to transfer your funds to TorFx in smaller increments.

Like us, if you have never used an international money transfer service and are feeling apprehensive it’s good advice to start small. Send a £5,000 tester so that you understand the process and feel confident about transferring the rest. Once the TorFx transaction has been processed funds usually take 3 days to appear in your Australian bank account. If you’re adopting a piece meal approach and need your funds by a specific date make sure you leave enough time.

Creating a TorFx account

What next? If you would like to test a small transaction or proceed with a large foreign money transfer to or from Australia we’d recommend signing up to TorFx. We’ve provided a quotation tool below to make things easier for Mum’s gone 2 Aus readers. At the end of this article we have included key facts about TorFx and on our Partners page you’ll find some useful currency exchange tools.

The next few months are going to be interesting for family Mum’s gone 2 Aus as we (hopefully) sell up in the UK, transfer our money and look for a property to purchase in Sydney (that isn’t a shoe box!).

We need to research the tax implications of our plans and the legal requirements of selling a property from Australia. If you’ve already been through the process of selling your overseas property and purchasing your first home down under please share your top tips. If you used a foreign currency service how did you get on? It’s an exciting but nerve wracking time so any advice you can give is appreciated. Thank you.

TorFx key facts:

  • In 2011 TorFX transacted over £600,000,000 in foreign exchange.
  • TorFX is authorised and regulated by the Financial Services Authority under the Payment Service Regulations 2009 for the provision of payment services.
  • TorFx is a member of the UK Money Transmitters Association.

Disclaimer: Mum has not been paid for this article. Through our partnership with TorFx we will receive referral commission that helps towards the running of our blog, providing essential support, advice and information for families relocating to Australia. Thank you for your support.

Related articles:

Don’t miss critical information about your move to Australia: Join Mum’s Facebook page to receive regular updates. Subscribe to our monthly newsletter to have a wrap-up of articles, tips and recommendations delivered straight to your Inbox.