Obtaining a mortgage from a non-domestic bank - steps and risks?

[Dauhee]

Hi folks,

I would like to evaluate the possibility of taking out a foreign bank mortgage. Any assistance on this would be much appreciated. My first hit in google came back with:

frenchmortgagedirect.com where a 2.2% 20year fixed mortgage is possible for LTV80%

OK this is only for a France based property but gives me a starting point.

There will be a risk using a bank from another country, but going fixed should alleviate that. Would be interested to hear if other people have looked into, or even taken one of these mortgages?

Thanks.

 

[Brendan Burgess]

Hi Dauhee

I would be delighted if your research ends in getting a mortgage from a foreign lender. You could set a precedent for others.

There is no risk for the borrower in getting a loan from a lender in the eurozone. If it's a variable mortgage, they can vary the rate in the same way as Irish lenders can.

There would be a currency risk in taking out a mortgage in another currency e.g. sterling.

The Irish borrower in arrears is very protected by the Code of Conduct on Mortgage Arrears. While a French lender would not be bound by that (?), they would find it even more difficult than an Irish lender to take any effective action to recover their debt. Which is why I think you will find it very hard to get a mortgage from a lender who has not got a set-up in Ireland.

Brendan

 

[Dauhee]

It looks like domestic banks have no lending facilities for funds to be spent outside of their respective countries. It is possible for residents in same territory as bank to fund a house in another country . . . . . . . so short of getting residency in another country I won't be finding an alternative bank any time soon.

I could become a digital citizen of Estonia, and take out a mortgage on a foreign property. However am only seeing possibility of 2.70% fixed rate for 5 years which isn't worth the risk if Frank will be coming in close to that in the near term.