Moving home from abroad but will Irish lenders offer me a mortgage?

I'm currently living abroad in Canada. However, I'm looking at moving back home to Ireland in 2025. I'm looking at purchasing my first home. However, the complexities and fog around a foreign resident (but Irish citizen) mortgage still elude me.

My question is what is the general lay of the land in this regard? Do I have options given the pull out of KBC from the Irish market?

Mr R.S., Canada

Securing an Irish mortgage from abroad is difficult but not impossible – at least if you are an Irish citizen. What is true is that your options will be less and the hoops you have to jump through more extensive.

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Lending is all about risk and banks in Ireland and particularly risk averse right now as they continue to try to get their books back in order after a decade of increasingly reckless lending came unstuck in the financial crash of 2008.

Thirteen years on, they are still stuck with significant State shareholdings – the price of crisis era bailouts. Their miserable track record from that period also means Irish banks are required by European oversight to be keep bigger reserves, leaving less for lending and pushing up interest rates.

The difficulty Irish lenders have in ever securing possession through the courts of properties in the event of mortgage default exacerbates that issue.

Those factors are behind the decisions of both Ulster Bank and KBC Bank to exit the Irish market in the medium term future.

In any case, for some time, most Irish lenders have simply refused to countenance mortgage lending to foreign residents. Those that do are more open to applications from Irish citizens and former residents who have moved abroad and are now looking to return. They are also more open to applications from within the euro zone for regulatory reasons.

But that doesn’t mean there is no chance.

There are a number of mortgage brokers who say they specialise in this area.

My understanding is that, among the lenders, AIB at least – there may be others – does still consider mortgage applications from people living in places like Canada who are considering moving to Ireland.

The rub, for you, is that such applications will generally be assessed under buy to let (or property investment) criteria rather than someone looking to buy a family home.

The implication of this is that you will be required to have a much larger deposit – up to 35 per cent of the purchase price – rather than the 10 per cent which a first-time buyer in Ireland would generally be required to put up.

You also will not have access to incentives like the Help to Buy scheme that allow first time purchasers of new build properties to claim back some previously paid tax to help meet the cost of that deposit.

You will still be bound by the Central Bank rules that state you can borrow only 3.5 times your income – and if you are talking about moving jobs to facilitate your return, you can expect the lender to take a very cautious view of your income.

AIB states on its site that it will treat people who are coming home now as “principal dwelling house” applicants – i.e. family home buyers required to put up just the 10 per cent deposit – but that does not fit your plan of buying now to return in about four year’s time. In any case, I have to say I’ve never come across anyone who was treated that way coming from abroad...by any Irish lender.

You’ll also obviously require copies of your credit history both in this State, if relevant, and where you currently live as well as bank and credit card statements going back six months, and details of employment, earnings etc as would be standard for any Irish mortgage applicant.

For those who are not citizens, it will be even tougher and they may find that they have to wait until they have arrive and have settled in Ireland with a financial and employment record here before lenders will consider them for a mortgage.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into