Mortgage lenders across EU

[micheller]

Hi All,

Apologies in advance if this is a silly question.
Is it possible in practice to get a mortgage from a Lender in another EU country offering preferential rates to the irish market- i.e a long term fixed rate better than irish rates? If so, which institutions are best to look at?

Thanks,
Michelle.

 

[Persius]

www.interhyp.de are quoting a nominal rate of 4.08% fixed for five years (which is an "effictive" rate of 4.16%, I think this is the same as APR). It's only for < 60% LTV morgages.

I don't know how this compares with Irish fixed rates, as I've only been looking at variable rates. I wouldn't expect there to be much variation in the interest rates across the Eurozone. You could try Swiss or Japanese banks for lower interest rates, but of course you could lose a lot of money if their currency appreciated against the Euro

Note, however that foreign banks will generally only loan money if you have an asset in their country which they can repossess in the event that you can't repay their loan. As an FTB it's probably a non-starter.

 

[micheller]

Ah- thanks Persius, that probably reasons why everyone isn't doing it!
Thanks again,m.

 

[dam099]

www.interhyp.de are quoting a nominal rate of 4.08% fixed for five years (which is an "effictive" rate of 4.16%, I think this is the same as APR). It's only for < 60% LTV morgages..

I doubt it is the same as APR. Generally in the current environment the APR for a fixed rate loan is lower than the nominal rate as the APR takes into account the typically lower expected variable rate after the fixed term expires (unless the German banks charge significant fees and/or use unfavourable interest rate charging mechanisms which could outweigh the effect of the lower variable rates in which case this could be an APR figure)

I don't know how this compares with Irish fixed rates, as I've only been looking at variable rates. I wouldn't expect there to be much variation in the interest rates across the Eurozone.

Taking a quick look at primafinance.ie for five year fixed rates the range of nominal rates in Ireland seems to be 4.35 to 4.99 so on the face of it they look a little cheaper but without having APR's calculated on a like basis its hard to say for sure. For longer term fixed rates the difference is even greater (they offer 4.21 nominal versus a range of 5.10 to 5.40 for the Irish banks). They also offer 20 year fixed rate at 4.66% which seem rare in Ireland (BOI quote 5.49%).

There has been much discussion in other threads about whether it is better to fix or not, however I think the balance of the factors might be a little more in favour of fixed if the margins of the Irish banks on fixed rates were more in line with the lower margins the German banks appear to offer. I know I have read before that the percentage of Germans on fixed rates is much higher than in Ireland which would tend to make one think that either the economic arguements are more in favour of fixed rates for them or they crave the security of fixed rates more.