Chapter 09 · Currency & payments
Forward contract for Florida real estate purchase
Lock in USD/CAD exchange rate 90–180 days ahead for real estate purchase with zero rate risk.
Direct answer · 60-second summary
The 60-second version
FX forward contract: Buy USD 6–12 months in advance at a fixed locked rate. Perfect for financing Florida real estate purchase with certainty and zero exchange rate risk between offer and closing.
Acronyms used in this guide
- CAD — Canadian Dollar
- USD — United States Dollar
- FX — Foreign exchange
What is an FX forward contract?
An agreement between you and an investment bank to fix the exchange rate now for a future transfer. Example: Today, you contract to buy $200,000 USD at 0.7150 USD/CAD rate in 120 days. No matter what the rate does, you pay exactly 200,000 ÷ 0.7150 = $279,720 CAD.
Major advantage: Budget certainty for real estate transfer.
How it works for real estate purchase
- You submit real estate offer (price $500,000 USD)
- Expected closing: 120 days after offer accepted
- Contact investment bank (RBC, TD, BMO, Scotiabank) or specialized FX broker
- Request forward quote USD/CAD for $500,000 USD at 120 days
- Rate locked immediately (e.g., 0.7150 = $699,300 CAD required)
- Set up CAD financing (mortgage, savings)
- At closing, USD wires at fixed rate, regardless of market
Forward contract costs
- Bank fees: typically $0–$500 CAD (one-time, to structure contract)
- FX markup: 0.05–0.25% (less than ordinary bank 1.5–3%)
- Implicit interest (forward points): small cost tied to CAD–USD interest rate differential (usually < 0.1%)
- Total cost on $500,000 USD: estimated $500–$2,000 CAD (much less than unhedged exchange risk)
Who can get a forward?
Individuals: Yes, for real estate purchase/investment if amount > $50,000 USD (below that, banks refuse)
Typical duration: 30 days to 24 months (real estate: typically 90–180 days)
Requirements: ID verification, source of funds, purpose of transfer (real estate purchase accepted)
Every figure, rate, threshold, and deadline in this guide is drawn from a verifiable primary source listed at the bottom of the page. The article is updated whenever the underlying rules change, with a fresh review date stamped at the top.
Sources and references
Public sources verified as of the last review date (Bank of Canada, FINTRAC, IRS, Wise, Knightsbridge FX, Canadian banks).
Disclaimer
This guide is for educational purpose only. Figures, rates, thresholds, timelines and rules are drawn from public sources at the date shown and may change.
For any concrete decision on currency exchange or cross-border payments, consult a cross-border tax advisor, a tax attorney, or a licensed FX broker.