Understanding FX margin vs. transfer fees

Most of what a transfer costs is invisible. A worked example on a €400,000 completion, and why headline fees are the wrong thing to optimise for.

Author

Andréas Hobbelin

Reviewed by

Andréas Hobbelin

Last reviewed

2026-06-01

Reading time

5 minutes

Consider a €400,000 completion, funded from GBP. A provider advertising "no transfer fees" but with a 1.2% margin costs €4,800 in effective spread. A provider with a €15 fee and a 0.35% margin costs €1,415 all-in.

The numbers

On a transfer of this size, the fee is a rounding error. The spread is the whole product. Every "free" claim in international payments is a claim about which of the two you are being charged on.

How to read a quote

Ask for the rate and compare it against the interbank mid-market rate on Reuters or Bloomberg at the same instant. The difference, expressed as a percentage, is your true cost. It should be small.

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