Case Study: Using Flexible Forward Contracts for Portuguese Property Purchase
Forward contracts offer certainty, but traditional forwards lock you into rigid completion dates. For Portuguese property purchases—where delays are common—inflexibility can cost you. This case study shows how flexible forwards solve that problem.
David faced a dilemma: lock in an attractive GBP/EUR rate with a standard forward contract, or stay on spot transfers and hope the rate didn't move against him during the three-month completion period. A 2% adverse movement would cost him £18,000 on his €450,000 purchase.
Standard forward contracts would have given him rate certainty, but Portuguese property transactions rarely complete exactly on schedule. Building delays, legal complications, or vendor issues could push completion back—and breaking a forward contract early means penalties that eliminate any savings.
Flexible forward contracts gave David the best of both worlds: a locked-in rate with the ability to draw down funds across a window period rather than a single fixed date. This flexibility proved essential when his completion date shifted twice during the legal process.
This detailed case study breaks down David's exact strategy, including how he structured the flexible forward, managed the two completion delays, and ultimately completed his purchase with significant savings compared to both spot transfers and traditional forwards. Real numbers, real timeline, real results.
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