Mortgage Question

Belfastmoneysaver

Is there any way to get a mortgage from a Irish bank for a house in the North - Thinking that interest rates are so much lower down there! Anyone know?

Oompa_Lumpa

Nice idea in theory, and whatever about the practical barriers that would stop this, business finance would dictate that you can't make a significant saving from doing this.

The reason being that the differential in the interest rate should be offset in the future by the movement in the FX currency markets between sterling and the Euro.

Otherwise you would have investors / speculators borrowing huge amounts of Euro and sticking it in a UK bank and making risk free money. The problem is that the interest gained is in GBP and the interest payable is in Euro - you have to then convert the GBP into Euro to make the loan repayments and economics dictate that at that point you will give away your "profit".

Don't ask me for the specifics of how they cancel out, I just remember from my business finance that they do.

leftieM

You could ask the Bank of Ireland or one of the other banks that operates on both sides of the border. However, if they say yes I'll be amazed!

bingo_bango

I can't see any problem in the bank giving you a mortgage for an 'overseas' property, but I can see issues with you not being resident in the country the mortgage originates from.
AFAIK, you can live in NI, and have an account in ROI, but you can only have a set amount of money in that account for tax purposes (about €12K I think). I would imagine that there would be something similar on borrowing. No harm in ringing and asking though, I've always found BOI to have very helpful staff when making queries.

Thriftylady

Bank of Ireland or Ulster Bank are probably the most likely to be able to do this, since they operate under the same company name both north and south of the border.

Having said that, it might be a bit of a grey area legally, and the sort of thing that they only do for 'special customers'......