• Page :
  • 1
  • Text Only
Voting History
rated:
Hey all,

My USA-based parents are buying a home in Canada. At around $290,000 CAD for the home, they are doing a down payment of approximately $90,000 CAD.

All of their accounts are U.S.-based accounts in USD. They're planning on doing a wire transfer at this point into a USD account at a Canadian bank (?), but I want to make sure they don't get hit in the currency exchange. What is the best way for them to change ~$70,000 USD into $90,000 CAD?

Member Summary
Most Recent Posts
For this large amount you want to use "Norbert's gambit."

revheck (Aug. 13, 2016 @ 9:59a) |

They found a home in BC. They are originally from Canada. They are US citizens (as am I), but they wish to move back to ... (more)

fearless62 (Aug. 13, 2016 @ 2:06p) |

Remember, Transferwise has a daily and annual limit. They'll need to do two transfers on different days: https://transf... (more)

burgerwars (Aug. 13, 2016 @ 2:46p) |

Staff Summary
  • Also categorized in:
Thanks for visiting FatWallet.com. Join for free to remove this ad.

Most of the major banks do currency exchange, but don't know of any who are not going to have a fee of some sort for that amount.

Called any banks??

How about their mortgage holder?

Wire transfer is clearly the best way to do the transfer. Their bank should be able to quote you what the fees and exchange rates would to wire CAD to a Canadian account. Compare against an operator like Transferwise. Remember to look all-in - how many US$ will you need to spend to get C$90,000 into the destination account? At the end of the day, it doesn't matter whether the money is going to a wire fee or a worse exchange rate.

what city in canada?

CurrencyFair is currently quoting 90,000 CAD = 68,288 USD, which is half percent exchange rate charge, much better than the 3% to 5% your bank will charge.  Could save you a couple thousand dollars.

If you use CurrencyFair, use your Canadian address, since they don't currently accept USA customers due to ornery American laws.

If you want to use USA address, TransferWise is quoting 90,000 CAD = 69,166.54 USD.
fearless62 said:   They're planning on doing a wire transfer at this point into a USD account at a Canadian bank
If you decide to use TransferWise or CurrencyFair to save money, skip this step and wire or ACH the money to the exchanger, who will then send it to your CAD account.

I do suggest, if they haven't already, open a Canadian bank account. Expenses for the home will need to be paid in Canadian dollars. They'll probably also need a Canadian ITN number for non-residents (taxpayer ID number) if they don't have a social insurance number, for filing any tax returns in Canada.

As far as a bank, maybe look at Royal Bank and a linked account with RBC Bank USA. They can do transfers between the accounts online. The exchange rates are average. For large amounts they'll need to call to inquire about a better rate.

Ask the sending bank and receiving bank the fees at the same time. Sometimes it's cheaper to send XX in USD and you end up with more Canadian. Other times it's better sending in USD and letting the Canadian bank do it.

Tax ID is only required if they're renting the property, and they'll need a Canadian resident as a nominee (I forget the exact word) for the Canada Revenue Agency to docs to.

If your parents are on the east coast, take a look at TD Bank. Specifically their Cross-Border offerings

Buckmann said:   If your parents are on the east coast, take a look at TD Bank. Specifically their Cross-Border offerings
  
I'd echo exactly that, and also looking at RBC which has similar offerings. Having a CAD account and USD account that you can push funds between instantly is easy and cost effective. I've had similar setups with Citibank in the past during overseas job postings.

Just called our back office and our rate today is .7947, which would equal $71,523. Our fee is $45 and then you'd need to consider the receiving bank's fee. No, I can't help you with this transaction. Just posting an example.

Canadian banks seem to have much better CAD/USexchange rates than US ones. I've had to exchange CAD to US, and it was better to do the currency exchange in Canada than the US.

That said, I would also look into exchange rates here in the US, to be certain.

As long as the seller is not on a humanitarian mission in Nigeria, you should be fine.....

LOL, escaping the current presidential election? Can't say I blame you.

rufflesinc said:   what city in canada?

Must not be Vancouver. You cant buy a tool shed for this amount there.

xe.com

If the following mortgage payments will also be in CAD, then you might have to come up with a long term solution, such as a Canadian mortgage company that works in USD, and maybe avoid the monthly $45 fee for wiring the mortgage payment.

ATM exchange fees are very reasonable.

I generally use xetrade for currency transfer from US to Canada. They can do ACH from US bank to extrade, to Canadian based bank account. For really large amount, you might want to do a bit more rate shopping. HSBC premier might be an option to keep rates relatively competitive (though they are a bureaucratic nightmare).

Just as a heads up, if you open a Canadian account and have over $10k in it for even a single minute, you will need to file a Fincen Form 114 Foreign Bank Account form. Massive penalties for not filing, up to 50% of the highest value in the account.

Rajjeq said:   Just as a heads up, if you open a Canadian account and have over $10k in it for even a single minute, you will need to file a Fincen Form 114 Foreign Bank Account form. Massive penalties for not filing, up to 50% of the highest value in the account.

Easy-peasy. It's a PDF form you fill out with basic information about the account(s) that you then upload.

There's a different requirement for foreign deposits over $50K, but I'm not familiar with.

It is easy. But most people are not aware of it. Also, it must be received by the government by June 30th with no extension and is filed separately from your tax return, another reason why people miss it.

fearless62 said:   My USA-based parents are buying a home in Canada.
 


Why?

ksea said:   
fearless62 said:   My USA-based parents are buying a home in Canada.

Why?

  more importantly, where?

ksea said:   fearless62 said:   My USA-based parents are buying a home in Canada.
 

Why?


Maybe this: http://cbiftrumpwins.com

burgerwars said:   
ksea said:   
fearless62 said:   My USA-based parents are buying a home in Canada.
Why?


Maybe this: http://cbiftrumpwins.com

  
Best thing there is in North Sydney:  The ferry to Newfoundland!  


search results
Disclaimer
rufflesinc said:   
ksea said:   
fearless62 said:   My USA-based parents are buying a home in Canada.

Why?

  more importantly, where?

  A search of the realtor.ca site (house anywhere in Canada under 300K) yields 70,888 listings. Take your pick.

For this large amount you want to use "Norbert's gambit."

rufflesinc said:   
ksea said:   
fearless62 said:   My USA-based parents are buying a home in Canada.

Why?

  more importantly, where?

  
They found a home in BC. They are originally from Canada. They are US citizens (as am I), but they wish to move back to Canada.

It looks like they will use TransferWise. Thanks for the suggestions, everyone. Also, thanks for the heads-up about the form.

fearless62 said:   rufflesinc said:   
ksea said:   
fearless62 said:   My USA-based parents are buying a home in Canada.

Why?

  more importantly, where?

  
They found a home in BC. They are originally from Canada. They are US citizens (as am I), but they wish to move back to Canada.

It looks like they will use TransferWise. Thanks for the suggestions, everyone. Also, thanks for the heads-up about the form.


Remember, Transferwise has a daily and annual limit. They'll need to do two transfers on different days: https://transferwise.com/help/article/1667423/us-dollar-transfers/usd-transfers



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2017