Foreign mortgages is it possible?

jimbobaloobob

Just reading this article in the paper got me wondering.

http://https://m.independent.ie/business/personal-finance/banks-fleece-homeowners-for-extra-2k-as-eu-rates-fall-38220970.html

What restrictions are in place to stop an Irish resident getting a mortgage approved elsewhere? Is it done? If not why not. Thanks.

srsly78

There is no restriction, you can already get a mortgage here from Belgian and UK banks. However the interest rate you get charged reflects the difficulties inherent to our property market.

Basically the interest rate is high because many people do not pay their mortgage, and it's difficult to repossess.

Jim2007

There is no restrictions on an EU bank giving such a mortgage apart from the fact that the banks don't want to do it. Nor for that matter are they interested in entering the Irish market.

Getting involved in any mortgage market requires a lot of local knowledge and it would not make any sense for foreign banks to try and build up that knowledge for the same of a few customers.

Furthermore, foreign mortgages almost always end in disaster, so bank shareholders, espically institutional shareholders to not look kindly on bank that engage in such operations. So it does not happen very often.

jimbobaloobob

Ok thanks I didn't realise what ye say was possible even if not looked at favourably. So in my situation I have an old commercial mortgage that has a 5% interest rate. 180k owing but owed over 6 properties. I was considering changing to get a better rate and possible have the risk only associated with one of the properties. Is that any more attractive to banks here or overseas.

Jim2007

jimbobaloobob wrote: »

Ok thanks I didn't realise what ye say was possible even if not looked at favourably. So in my situation I have an old commercial mortgage that has a 5% interest rate. 180k owing but owed over 6 properties. I was considering changing to get a better rate and possible have the risk only associated with one of the properties. Is that any more attractive to banks here or overseas.

It does not change the fact that it is a mortgage and they still will not know anything about the Irish market.

jimbobaloobob

Ok thanks Jim

Trish56

I think the correct answer is NO you can't get a mortgage from a bank/lender operating outside Ireland.

jimbobaloobob

Why do you say it's a NO Trish is it not that they wouldn't be interested?

Trish56

To lend in Ireland they need to be registered and regulated by the Central Bank and the only non Irish banks operating here with years are KBC and Ulster Bank and their variable rates are 4.30% with fixed rates lower.

In fact these two banks did not pass on any but one of the ECB reductions on variable rates. AIB bank is the only Irish Bank operating here that did and their variable rate is 3.15%.

I've no idea why foreign banks don't want to operate here it may be as a previous poster said that it is too hard to repossess property here.

jimbobaloobob wrote: »

Why do you say it's a NO Trish is it not that they wouldn't be interested?

listermint

Trish56 wrote: »

To lend in Ireland they need to be registered and regulated by the Central Bank and the only non Irish banks operating here with years are KBC and Ulster Bank and their variable rates are 4.30% with fixed rates lower.

In fact these two banks did not pass on any but one of the ECB reductions on variable rates. AIB bank is the only Irish Bank operating here that did and their variable rate is 3.15%.

I've no idea why foreign banks don't want to operate here it may be as a previous poster said that it is too hard to repossess property here.

KBC and Ulster variable rates are not 4.3%

What nonsense is his.

You working for AIB?

NSAman

Obviously, there is the other alternative which is a mortgage for an Irish property but taken on a property in another country.

So the Irish property would be free and clear but the mortgage would be on a property in another country for a different house....

Have been down the road of foreign banks not lending for Irish property. It IS possible but as others have said the interest rates are prohibitive. Better to have the mortgage in the country which you are known anyhow, the lending rates tend to be lower and the bank feels safer.

Damiencm

jimbobaloobob wrote:

Ok thanks I didn't realise what ye say was possible even if not looked at favourably. So in my situation I have an old commercial mortgage that has a 5% interest rate. 180k owing but owed over 6 properties. I was considering changing to get a better rate and possible have the risk only associated with one of the properties. Is that any more attractive to banks here or overseas.

5% on a commercial loan is pretty much where the market is at. Actually for the amount you are talking about E180k, no institution will be falling over themselves to offer you a lower rate

jimbobaloobob

Ok thanks everyone. Appreciate the input.

Trish56

No I'm not working for AIB, look up standard variable rates for all the banks you will find Ulster Bank = 4.30%, KBC = 4.25%, Bank of Ireland 4.50%, AIB/Haven = 3.15%.

You can get a lower loan to value rate from KBC however Ulster 90% variable rate is 4.30% and BOI is 4.50%.

listermint wrote: »

KBC and Ulster variable rates are not 4.3%

What nonsense is his.

You working for AIB?

Jim2007

Trish56 wrote: »

To lend in Ireland they need to be registered and regulated by the Central Bank.

You misunderstand how this works. They are not lending in Ireland nor are they seeking business in Ireland. In accordance with the EU rules on passporting they are fully entitled to issue a mortgage in their country to an Irish citizen resident in Ireland based on an Irish property providing the borrower earns their income in Euros. They just are not interested in doing so.

Trish56

I know how it works. I answered the question that the OP asked 'could he be granted a mortgage by a bank operating outside Ireland for a property in Ireland at the lower rates as advertised in Irish Times/Irish Independent last week' The answer is NO as they are not operating in Ireland at the current time and he is interested in switching mortgage to avail of the lower rates.

Jim2007 wrote: »

You misunderstand how this works. They are not lending in Ireland nor are they seeking business in Ireland. In accordance with the EU rules on passporting they are fully entitled to issue a mortgage in their country to an Irish citizen resident in Ireland based on an Irish property providing the borrower earns their income in Euros. They just are not interested in doing so.