Can I apply for a mortgage from a foreign bank for a home in Ireland?

Ask the Experts: Can we apply for a loan in Spain, where interest rates are cheaper?

Shop around for  the best mortgage rate. Photograph: iStock

Shop around for the best mortgage rate. Photograph: iStock

 

Question:

I am looking to buy a house in Ireland (where I currently live) but I find Irish mortgages very expensive, if we compare them to the Spanish ones. Is it an option asking for a mortgage back at home in Spain to buy a house here?

Answer: Joey Sheehan, head of credit, www.mymortgages.ie

An Irish bank will only take security over an Irish property (i.e. within the State) and will not lend to buy property in foreign countries. This is the same in other countries; so a Spanish bank will only lend taking a Spanish property as security. Unfortunately this means you won’t be able to fund your Irish property purchase in this way.

While Ireland’s mortgage rates are much higher than some of our European counterparts, they have been coming down significantly in recent years, which means you may well be able to secure a good rate here in Ireland.

An example of some really good rates currently available would be a two-year fixed of 2.3 per cent (90 per cent LTV) or a four-year fixed of 2.6 per cent (90 per cent LTV), both with Ulster Bank, or a five-year fixed of 2.8 per cent (90 per cent LTV) and a 10-year fixed of 3.05 per cent (60 per cent LTV), on offer from KBC. There’s definitely value to be had so if you do decide to buy, be sure to shop around.

For more about applying for a mortgage in Ireland having returned from abroad, see irishtimes.com/life-and-style/abroad/mortgages-for-returning-emigrants-how-to-apply-1.3119588

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