Living in Australia. Looking to buy with an Irish mortgage - possible?

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daveg

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We have recently moved to Australia and are now looking to buy a home. As interest rates here are very high I wondered if we might be able to get a mortgage from home (Ireland) to buy a home here? What may help is that my wife still works (from home) for her Irish employer and has her wages paid every month into our Irish account. We only moved 4 months ago. I estimate we will need to borrow just over 70% of the house price as we have some equity here.

Any advice would be much appreciated.
 
Don't want to be negative but I think thats' a crazy strategy even if find an Irish financial institution to give u the loan.

I know the Euro/Aud interest rate differenial is 3.25% at moment but u are opening yourself up to exchange rate risk plus currency conversion costs( could be 1% or more when converting euro loan to Aud and vice versa when making monthly payments).

I migrated to sydney from Ireland in 2003 and have bought 2 properties with LTV 75% in 2006(both financed locally in Aud)
I never considered taking an Euro loan for above purchases due to reasons above and if I was to do it,would borrow in yen where interest rates are 0.5%.

Also bear in mind that latest comments from ECB are bearish whilst rates in Australia are forecast to come down in 2009.
 
macbri said:
Don't want to be negative but I think thats' a crazy strategy even if find an Irish financial institution to give u the loan.

I know the Euro/Aud interest rate differenial is 3.25% at moment but u are opening yourself up to exchange rate risk plus currency conversion costs( could be 1% or more when converting euro loan to Aud and vice versa when making monthly payments).

I migrated to sydney from Ireland in 2003 and have bought 2 properties with LTV 75% in 2006(both financed locally in Aud)
I never considered taking an Euro loan for above purchases due to reasons above and if I was to do it,would borrow in yen where interest rates are 0.5%.

Also bear in mind that latest comments from ECB are bearish whilst rates in Australia are forecast to come down in 2009.
Click to expand...

Not so much of a risk as my wife is currently paid into our Irish account so this will be used to service the loan. Therefore no currency conversion issues except for the purchase of the house.
 
Hi Dave
Where are you looking to buy in Oz, Brisbaner is one of the better cities to look at at the moment, sydney, melbourne and Perth are relatively flat
 
As far as I know most banks etc will only give you a mortage to buy a property in the state. lived in UK and wanted to buy in the ROI, had to get funds from Irish bank.
 
AFAIK, the banks generally don't like to give foreign mortgages, because if you default on the mortgage, it would be tough for them to try to sell a property in Australia. It's easier for them to stick to properties in their country regarding postential defaulters.
 
the above post is right it is all about where the security is and if they dont have a presence in the market then little hope. only method is to use collateral within ireland as security but to be perfectly honest i agree with the exchange rate issues above. JPY have had lowest interest rates for past decade but few people looked to take advantage of this for res mortgages as it is rarely done
 
Hi Daveg,
Is your wife living in Australia now?.
If so,why is she being paid in Euros and will this continue long term?(ie to match length of proposed Euro mortgage)

I brought substanial euros with me when I migrated in 2003 which I have converted into Aud over the last number of years.
I'm currently getting 8.15% on a 6 month Aud deposit and 7.0% on an Aud online at call deposit facility which are much higher than comparable rates I was getting on my Euro deposits.
 
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