For everyone you want to get the most Valencia Property for your money especially if your currency has tanked before you get here. (Yes, I’m looking at you Britain). Therefore, it’s always good to be reminded about the ways Valencia Property helps you to make the most of your money when buying your apartment or house in Valencia.

Today we will look at the best ways to save money on your Valencia Property purchase from the smallest savings up to the really big ones. Let’s start with the most important ones ok?

Currency Transfer

Many people are tempted to make a transfer through their own bank in their home country to their Spanish account. This is the simplest method but it is not usually the most efficient. If you are transferring from an account with a different currency, Dollars, Pounds, Krona, Rand etc…, then it is very probable that you can get a much better deal using a currency partner such as Currencies Direct, see our article about them here.

We prefer the system of using Currencies Direct and a Spanish bank for the practicalities of buying a property in Spain, you read the article right? This is the easiest way to save thousands on your property purchase. You can also fix your rate now before your currency tanks some more if you think it is likely to go that way! (Still looking at you UK but also thinking of all of you South Africans with Rand too!)

UPDATE October 2020

Specifically for Americans this one. American banks are notorious for ripping off their customers, probably worse than Spanish banks, see below. However we didn’t realise how much until this week (Other countries’ banks are not so blatant). We have a client needing to transfer the equivalent of 400k in US dollars to Spain. He was going to use his bank. After meeting with Currencies Direct in their office in Valencia and chatting with Adam they compared rates by using the following routes to get the money here:

1. Direct bank transfer from US bank to the Spanish bank account here.
2. USA bank transfer to Currencies Direct account in the States and then transfer from Currencies Direct to client account here in Spain.

The difference was 3.5% in favour of method two. Doesn’t sound too much but 3.5% over 400k meant a difference of 11,760 Euros EXTRA appearing in their Spanish bank account and that’s before you start factoring in costs such as receiving directly from a foreign bank account, which many Spanish banks charge for, and the cost of the bank drafts on purchase which would be considerably higher for non Currencies Direct clients, up to 1.2% in some banks.

Your Bank Account

You have the right to open an account in any Spanish bank of course but some are better than others. Currencies Direct have an agreement with La Caixa bank which will save you a lot of money. One of the things that Spanish banks often do is charge you for receiving money from an account abroad. This amount can be up to 0.5% with quite a few banks and even more with others. They don’t advertise these fees of course.

Even more important is that if you are buying a property then many banks charge you a percentage to emit a bank draft for use in the notary. And these costs again can be a percentage of the price meaning you can pay up to 1500 Euros for a bank draft on a property of 200k for example. The agreement between Currencies Direct and La Caixa means that La Caixa will charge a maximum of 200 Euros for the bank draft.

Spanish banks “earned” more than 5 billion in hidden fees last year. They are notorious for little charges so it is useful to talk with them about their charges when opening an account and become clear about what you will be charged for. You should be looking at monthly account fees, credit and debit card fees, charges for receiving money from abroad, charges for emitting cheques or depositing cheques and a myriad of other things. You should also choose a bank with good internet banking with excellent security.

The best banks if for whatever reason you don’t want to use La Caixa are Sabadell, BBVA and then and only then, Santander. You can read all sorts of online reviews of all of them, many negative, but many are older reviews. Sabadell have an excellent mortgage process too, Mortgage Direct use them a lot for example, more of that later.

You will probably need a Spanish bank account, it’s just so much more practical and currently easier to live with despite the costs so it’s best to choose the best of a rather mediocre bunch. However to complement this main account we recommend using a Challenger Bank for day to day operations too. 

Challenger Banks

There is a new breed of Challenger Banks trying to make waves in the market in Spain. They don’t have the branch network that the main banks above offer but they can be a lot cheaper for their charges and have much better deals on their debit and credit cards.

EVO bank has a good reputation and in the big cities has a decent number of branches. It is fully owned by Bankinter now and tries new initiatives of its parent bank first through EVO. They also have a branch on the Plaza del Ayuntamiento in Valencia which is useful. 

Open Bank is a subsidiary of Santander and is mostly just online, it has a branch in Madrid. Again new products are often tried in Open Bank and if successful they move to Santander.

N26 is a German based online bank which will give you a full IBAN number for your account. The only issue with this seems was trying to Direct Debit payments into the bank from Spanish Utility companies and with the introduction of Spanish IBAN numbers at the end of 2019 this has now been resolved.

Transferwise is an excellent option similar to N26 and Revolut. If you are self employed then Transferwise is a great option for receiving payments in the currency of the person who is paying you and then transferring it into the currency you want it to be is painless and cheap. They also offer a card to make payments from your account in Spain or anywhere else. Again the IBAN code is German so it may create problems with utility payments at times but for everything else it’s a great option.

Our favourite is Revolut, I use it every day. It offers you free cards, accounts in multiple currencies and even the ability to trade in Cryptocurrencies and shares. If you want a Revolut card sign up here. You get a free card and 10 Euros on it after your first purchase. You can download the app in the app store and register your card with your account. Again the IBAN of the Euro account is sometimes problematic, not always, for utilities direct debits but it usually works.

Both Transferwise and Revolut will save you huge amounts of money when making transfers from your original currencies into Euros for Spain and as they both offer full IBAN codes then they are the favourites of our clients for virtual banking.

Mortgage Costs

First the good news, mortgage costs have come down considerably as now it is the banks who have to pay the notary costs and taxes. As we have written before, we work with Mortgage Direct on getting mortgages for our clients. Why though should you use them rather than going directly to Sabadell for example?

The reason is that Mortgage Direct get much better offers from the banks for their clients as they bring in a lot of clients. When you walk in off the street into a bank branch to ask about and negotiate a mortgage the bank just sees you as a cash cow so that they complete their targets for the month and quarter. On the other hand, banks compete with each other to get the best deal for Mortgage Direct so they get you as a client and hundreds of other clients too.

Regarding your mortgage the offer from your bank may come with conditions such as having direct debits paid from your account, having a salary paid into the account, having a credit card, having house insurance through them etc… You will be offered a better interest rate on your mortgage according to what you take up with them. Remember though, you are not obliged to take any of them. (It usually works out better to do so on all of them except the house insurance)

Day to Day Cash

If you have your money in another country and don’t live here then you will be charged every time you make a withdrawal at an ATM, you may also press the wrong button and take the money out in your own currency at the conversion rate the bank decides is the best one, it’s always the best one for them not you.

Having a Revolut Card is the best thing I have done for my day to day cash from abroad. It is a Mastercard Debit accepted everywhere, you are immediately notified of payments made on your phone, you can set limits, set up a virtual card for online payments, block the card straight away if stolen or lost, and many other advantages. You also get to set the limits on it and can immediately change them for larger purchases if you want to keep the levels low normally if you fear hacking of your computer, and then change them back.

Transferwise also offer many of these advantages with a card accepted everywhere so bear them in mind too.

Recommendations

Our recommendation then to save as much money as possible is as follows. For purchasing a property open a Currencies Direct Account and a Spanish bank account with La Caixa to make your transfer from your home country if you are outside the Eurozone.

For day to day costs use your Spanish account but if you have income or savings in another country combine this with a Revolut Card and account and possibly a Transferwise account and card too. Their apps are excellent. If you are getting a mortgage use Mortgage Direct and take up the offers of the bank to put Direct Debits etc… through their accounts to get a reduced mortgage interest rate.

And finally use Valencia Property to negotiate your purchase with your seller. We will get you the best selection and the best price.

Do all of the above and you will potentially save thousands and maybe you can get your dream home in Valencia without giving up any of your red lines.

If you enjoyed this article then share it around and also take a look at the following articles that may also help you out. If you have any questions about money in Spain then mail us.