Though Ireland has seen a dramatic contraction in mortgage activity since the property crash, the market has now stabilised - is rising in many parts - and banks are again lending to overseas buyers for both investment purposes or holiday homes, albeit with some restrictions. They are also very keen to lend to ex-patriates who want to buy a home to return to in a few years' time. Here are the key factors for getting a mortgage in the Republic of Ireland.
Irish mortgages: what you need to know
- Loans of up to 70% LTV are available
- minimum loan is €100,000 and maximum loan is €500,000
- Interest rates will vary but are typically 3.25-4.75%
- The sum total of all interest payments you have to make on your debts (including your UK mortgage and any other personal loans you have) cannot exceed 40% of your net income.
- Recent changes to mortgage lending from the Central Bank of Ireland (2016) mean non-residents can only get mortgages if they can show a connection to the area in which they want to buy i.e. family ties, active Irish bank account and proof of regular travel to and from the location
For further information or to discuss a potential mortgage in the Republic of Ireland, please either complete the form opposite and we will be in touch or call us on 01494 410 125
How much can I borrow?
Though Irish residents can borrow up to 90% if they are first time buyers or 80% if not buying for the first time, overseas buyers are restricted under legislation to borrowing no more than 70% of the purchase price. However, if you are moving to the Republic of Ireland to live there, you may qualify for the 80% amount. Talk to us for details.
What are the Rates?
This wil vary depending on where and what you buy as well as your own circumstances but typically are in the 3.25-4.75% range.
Are there any income requirements?
Your income will be a key element of the application. Irish banks will need to see that it is consistent and sustainable. You will probably be asked to show not only that you have cash for the requisite deposit but also enough cash for your first 6 or 12 months of mortgage payments though this depends on where and what you buy,
What are the new requirements about having a connection to the area?
Changes in mortgage guidelines issued by the Central Bank of Ireland in 2016 mean that it has become even harder for non-residents to buy in the Republic of Ireland. Now you have to show a connection t the area in which you want to buy and this is usually evidence via family ties and must be proven by showing an active Irish bank account and evidence of regular travel to/from this location. In summary it means probably only Irish people (first or second generation) who have moved away from the island and now want to buy a holiday home can get mortgages. If you are a non-national or have no connection to the area you wish to buy in but are moving to Ireland you probably need to move there and rent for 6 months before then applying for a domestic mortgage as a resident.
Can I buy a Buy to Let in the Republic of Ireland?
No. The stated purpose of any home bought by a non-resident in the Republic of Ireland must be a holiday home.
Can I get development finance or self-build mortgages in the Republic of Ireland.
No. Mortgaes to non-residents are only available to buy finished properties and only as a holiday home.
What else do I need to know about Irish mortgages?
The minimum you can borrow is €100,000, the normal term is 25 years (like in the UK) and maximum age restrictions are usually 75.
What is the legal process like?
The Irish legal system is based on the UK one so should be familiar to many UK buyers. In general you will need to allow 1-2 months to complete a purchase and we will connect your with solicitors experienced in conveyancing in the Irish system (if you need one).
Any other advice for buying property in the Republic of Ireland?
Where you buy is key. If you are buying a flat in Dublin or a holiday home in West Cork then lenders are likely to be more amenable to your application that if you were buying in a small provincial town or an isolated rural setting. Things are getting better but credit is still limited.
Lastly, to get the best rates on your foreign exchange transactions we strongly recommend you open an account with HiFX. Quite simply, they will provide a far better exchange rate than your bank and they can do one off transactions or allow you to lock in a guaranteed FX rate on mortgage payments for up to one year in advance. To find out more and sign up, visit their website here http://www.hifxonline.co.uk
Overseas Mortgages are not regulated by the Financial Conduct Authority, nor are they protected by the Financial Ombudsman Service or Financial Services Compensation Scheme. They may not be covered by the home regulator of the country concerned either, so you should consider the risks carefully.
Are you looking for Overseas Mortgages?
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What is needed to apply
Applying for a Overseas Mortgage is very easy. Below are listed the things you need in order to apply.
- Eligibility Criteria Clean credit and sufficient income to make repayments is required.
- Documents Required Initially just an application form but in time you will be asked to prove income and ID
- Additional Comments The entire process takes 6-8 weeks depending on the country you are buying in
- What countries can I get a mortgage in?
Almost any. Though the popular destinations for UK residents buying overseas tend to be France, Spain, Italy, Portugal and the USA, mortgages can also be achieved in Turkey, Australia, New Zealand, South Africa, Singapore, Hong Kong and many more.
- How much can I borrow?
This depends on your circumstances but one key factor we look at is your Debt to Income ratio. Ideally the sum total of the repayments you make on all your debts per month plus the proposed payments for the overseas mortgage you want should not exceed 35-40% of your net income. This factor tends to be the biggest constraint on borrowers raising an overseas mortgage.
- How will I manage the language and cultural issues?
We will ensure you have access to English-speaking experts in the country you are intending to buy in.
- Will my UK credit record affect the success of my application?
Yes, it is a key factor in the eligibility criteria.
- How much will it cost to arrange my mortgage?
The fee to help prepare your mortgage varies from country to country but will be made clear to you in advance.
To learn more or to apply for a Overseas Mortgages please either ﬁll in the call back form at the top of this page or call us on 01494 410 125 and we'll walk you through your options at no cost or obligation.