Borrowing from overseas bank to buy in UK

johngun1

Hi,

I'm an Irish citizen living and working in the UK for 20+ years. Is there any reason why I can't arrange a mortgage through an Irish bank in Ireland at the Irish interest rates to buy a property in the UK?

I've heard of UK citizens raising mortgages through UK banks to buy in Spain. Wouldn't this be the same thing?

Cheers

johngun1

A_Nice_Englishman

If you borrowed in Euros you would have to pay back in Euros. If the Euro went up against the pound you would owe more than you started with but if it went down you would owe less. The sterling value of the monthly interest / repayments would also vary in line with exchange rates.

I'm not sure if an Irish bank would do this but if they would then it depends whether you are happy with this risk and want to indulge in currency speculation.

Personally, I wouldn't do it.

AndrewSmith

Agreed,

Very risky due to the exposure to exchange rate fluctuations. This also applies to buying abroad using an overseas funded mortgage.

Ian_W

Even if you are prepared to risk the currency fluctuations mentioned above, the main stumbling block may be whether an Irish Bank in Ireland [as opposed to BoI or AIB who also have UK based and regulated operations] would be prepared to lend you the money as both you and the property are in the UK? Bear in mind that residential mortgages are regulated financial products so I'm not sure it would be possible for them to do so.

The analogy with UK banks lending on Spanish property doesn't really match. AFAIK, and someone correct me if I'm wrong, they'll lend to UK residents wanting to buy but ex-pats based in Spain would normally use an off-shore UK bank or a Spanish one.

johngun1

Thanks Guys,

As the saying goes "if it seems too good to be true etc. I see what you mean. Seemed like a good idea at the time.

Cheers

johngun1