Case study - Jacky is looking to set up regular payments to New Zealand

Sydney local, Jacky has bought a house in her favourite holiday destination of New Zealand. She loves the fact that it’s a short flight away and comes with a much lower entry point than the overinflated prices of Australia’s major cities.

As she couldn’t afford to pay the property in full, she’s taken out a mortgage with one of the banks in New Zealand and will need to set up regular home loan payments. Jackie wants to find the most cost effective way to do this, so she starts by...

Comparing exchange rates

As most foreign exchange providers offer the option of recurring payments, Jackie has a wide range of choices when it comes to converting her Aussie dollars to NZD. She could set up a regular payment plan with her current bank that she knows and trusts or could see what else is on offer from challenger brands.

Jacky decides to do the latter and conducts a little online research. After all, Jackie will be sending large sums of money overseas, so even the slightest difference in exchange rate and fees could add up to a small fortune in the long run.

After punching in her numbers into an online comparison calculator, Jacky soon discovers that she’s far better off going for an FX provider who specialises solely in international money transfers, as the exchange rate she’ll receive will be far more competitive than what is offered by her current bank.

The FX provider gives her the option to either lock in this rate now, so that it will apply to each of her ongoing payments or set it up so that her money is converted at the rate of the day. As the Aussie dollar is at a high, Jacky decides to go for the fixed exchange rate option. On top of scoring a competitive rate she will also benefit from fee free transactions, as the provider wipes fees for those that are signing up for a regular payment plan.

Organising recurring payments

Now that Jacky has chosen her foreign exchange provider it’s time to set up her regular payments. The process she soon discovers is pretty simple, as all she needs to provide is the ongoing payment amount, frequency, her account details and the receiving bank’s account details.

As she has set up her home loan repayments monthly with the New Zealand bank, she needs to ensure that the payment is received by the due date which is the 6th of each month. The FX specialist informs Jacky that the payment can take anywhere between 1-5 days to reach the beneficiary’s bank, so she decides to set the recurring payment day on the 1st of each month, just to be safe.

Ending her contract

While Jackie’s home loan term spans over 25 years, the recurring payment contract is only set out for 12 months, so when her term is nearing its end, she’ll be contacted by the FX specialist to see whether she wants to extend this contract. At this time, it would be a wise idea for Jackie to review whether the IMT provider is still offering the best exchange rates, by comparing deals using an IMT comparison tool again.